23 June 2018

Samsung heir considered ‘suspect’ in South Korea scandal

KONFRONTASI - The heir to South Korea’s Samsung Corporation has been identified as a criminal suspect in an expanding investigation into allegations of corruption against impeached President Park Geun-hye, prosecutors said.

Lee Kyu-chul, a spokesman for the team of special prosecutors probing the influence-peddling scandal, announced on Wednesday that Lee Jae-yong, the vice chairman of Samsung Electronics and the son of the Samsung Group chairman Lee Kun-hee, would be interrogated as a “suspect” in connection to the bribery allegations in the case.

“We have decided to question Lee tomorrow morning... as a suspect,” the spokesman said, adding that prosecutors “left open the possibility” of formally arresting the Samsung scion later.

The scandal centers on President Park’s close confidante Choi Soon-sil, who allegedly used her ties to Park to coerce top firms into “donating” tens of millions of dollars to two non-profit foundations which she controlled.

Samsung was the largest contributor to the foundations. The major corporation also stands accused of separately donating millions of dollars to Choi to bankroll her daughter’s equestrian training in Germany in a bid to curry favor with the president.

South Korean prosecutors have intensely questioned Lee and other senior Samsung officials in recent months. The company’s authorities reportedly argued that although they were intimidated to donate funds, they did not seek any favors in return and thus the payments did not amount to a bribe.

Prosecutors, meanwhile, are probing whether Samsung bribed Choi in order to win state approval for a controversial merger that it pursued in 2015.

The merger of two Samsung group units — Cheil Industries and Samsung C&T — was regarded as a crucial step toward ensuring a smooth third-generation power transfer to Lee Jae-yong.

The move, however, was slammed by many, who insisted that it deliberately undervalued Samsung C&T’s stocks. But South Korea’s National Pension Service (NPS), a major Samsung shareholder, voted in favor of the merger, which eventually fell through.

Prosecutors have raided multiple Samsung offices as well as those of the NPS in relation to the scandal. The fund, the world’s third largest pension fund, is overseen by the Welfare Ministry.

Park was impeached by parliament last month on the allegation of colluding with Choi to extract money from the firms, but denies any criminal wrongdoing. The Constitutional Court is currently investigating the legitimacy of her impeachment, a process that could take up to six months.

If the court approves the impeachment, a presidential election will be held within 60 days.[ptv]