By Diplomacy Journal Lee Jon-young

SK Group's so-called “V Project” has become the subject of simultaneous investigations by the National Tax Service (NTS), police, and prosecutors, facing unprecedented legal risks.

The core of the investigation centers on allegations that SK Telecom entered into a contract with its IT subsidiary SK C&C (now SK Inc. C&C) for services that were never actually performed, then transferred funds. This is suspected to have been used to artificially inflate revenue, evade taxes, and as a means to reorganize the group's corporate structure.

The NTS conducted a detailed tax audit of SK Telecom starting in late 2024, centered on the Seoul Regional Tax Office's Investigation Division 4. The audit revealed issues such as the issuance of false tax invoices, excessive expense claims, and non-existent service contracts.

In May 2025, the NTS filed charges against SK Telecom and related individuals with the Seoul Northern District Prosecutors' Office for violations of the Tax Crime Punishment Act.

An official from the National Tax Service stated, “Beyond typical accounting errors, it appears that the business structure itself was designed for the purpose of tax evasion,” adding, “In addition to the evaded taxes, additional taxes will inevitably be imposed.”

Separately from the National Tax Service, the police launched an independent investigation focusing on criminal breach of trust charges. The key issue is whether SK Telecom caused damage to the company's assets by spending funds on non-existent projects and whether the profits were unfairly transferred to SK C&C.

The police have secured evidence that some funds were transferred through third-party accounts and are also looking into the possibility of slush funds. In addition to former and current executives, officials from external accounting firms and consulting companies are also under investigation.

After receiving the indictment from the National Tax Service, the prosecution assigned the case to the criminal division of the Seoul Northern District Prosecutors Office and launched an investigation. In the initial stage of the investigation, based on tax investigation reports and accounting data, the prosecution is conducting investigations of accounting managers, finance directors, and staff members of related affiliates.

In particular, the prosecution is focusing on the fact that these transactions were concentrated just before the merger of SK C&C and SK Inc. in 2015. There are indications that the corporate value was artificially inflated through the “V Project” to reorganize the corporate structure in a favorable manner.

There is a high possibility that this case will ultimately lead to the involvement of SK Group Chairman Chey Tae-won. At the time, Chairman Chey, who was the largest shareholder of SK C&C, secured a 23.4% stake in the holding company through the merger with SK Corp. in 2015, reaching the pinnacle of the group's control.

Prosecutors plan to review whether to change Chey's status from witness to suspect, focusing on whether he gave instructions and whether he received the report on the matter in advance.

This case goes beyond a simple tax evasion issue and could lead to violations of the Fair Trade Act, unfair disclosure of corporate mergers, and evasion of internal transaction regulations. Some point out that additional investigations by the Fair Trade Commission and the Financial Services Commission are inevitable.

In particular, SK C&C's value inflation and merger process are directly linked to the issue of fairness in the merger ratio of listed companies, raising the possibility of shareholder lawsuits and civil disputes in the future.

The “V Project” is not a simple accounting error or temporary mistake, but a systematic and structural problem. It is evaluated as an incident that exposed SK Group's internal control deficiencies, lack of transparency in corporate governance, and absence of responsible management.

The three-pronged investigation by the National Tax Service, police, and prosecution is expected to strengthen judicial oversight of conglomerates. The business community views this case as a test of SK Group's ethical management and a turning point for corporate governance reform.