This study examines the tunneling scenario of intragroup fee transactions in Korean large business groups, also known as chaebols. And, by extension, we examine whether scrutiny reduces the tunneling activity of chaebol groups. We find that intragroup fee transactions are exploited as wealth-shifting devices by controlling families of chaebol groups, consistent with our prediction. In specific, we present that not only trademark royalty, but also management consulting fee and real estate rent are utilized as means of tunneling. Further, we show that audit fees and hours, the number of related-party transaction committee members, and the regulation of Korea Fair Trade Commission are effective in reducing the tunneling phenomenon. This study adds to the literature on tunneling by shedding new light on intragroup fee transactions as potential tunneling devices. Thus, this study enriches our knowledge of intragroup tunneling, providing new insights for regulators on reducing the agency problem of business groups.