Samsung boss summoned in bribery probe

SPECIAL prosecutors called Samsung Electronics Co. Vice Chairman Jay Y. Lee for questioning as a suspect in a bribery investigation, deepening an influence—peddling scandal that has already led to the impeachment of South Korea’s president.

The de facto head of the Samsung Group was summoned to appear in Seoul on Thursday, special prosecution spokesman Lee Kyu-chul said in a briefing.

While Lee, 48, was widely expected to be called in for questioning, the fact that he was identified as a suspect was a surprise.

South Korea has been in the grip of a presidential scandal for months, with millions taking to the streets to demand the ouster of President Park Geun-hye.

Authorities are looking into whether Samsung and other chaebol business groups made payments to entities controlled by Choi Soon-sil, a Park confidant, in exchange for political favours.

The intensifying focus on Lee may jeopardise his ability to succeed his father as the head of Samsung.

“Special prosecutors are mainly after President Park, but in this case, to charge Park with bribery, they have to prove her connection with Samsung,” said Chung Sun-sup, who runs corporate researcher Chaebul.com.

“Prosecutors used to overlook the chaebols’ wrongdoings in the past, but this scandal is different because citizens can no longer tolerate the cozy relationship between politics and business.”

Prosecutors are investigating whether Samsung provided support to Choi in exchange for government help in ensuring a smooth transfer of power to Lee at the conglomerate.

In particular, they want to know whether the president exerted pressure on Korea’s national pension service to support the controversial merger of two Samsung Group companies, Cheil Industries Inc. and Samsung C&T Corp.

The deal, opposed by some investors, was approved in 2015 and makes it easier for Lee to gain control over the sprawling conglomerate his grandfather founded.

Samsung’s offices have been searched as part of the probe and Lee faced questions from parliament and prosecutors last year.  Two other top Samsung executives were called in on Monday to answer questions about the company’s role.

Today, investigators asked parliament to file a complaint against Lee for perjury during parliamentary testimony, without providing further details. A representative for Samsung Electronics declined to comment.

Shares in the Suwon, South Korea-based company rose to a new high on Wednesday, climbing 2,8 percent to 1,914,000 won at the close in Seoul, following an upbeat earnings announcement a fortnight ago that highlighted the resilience of the company’s business.

When he testified in December, Lee said he never ordered donations to be made in return for preferential measures and rejected allegations he received wrongful government support to push through the merger.

Still, Lee, who has been put under a travel ban, confirmed his private meetings with Park and that Samsung had provided a horse worth 1 billion won (US$837 000) that was used for equestrian lessons by Choi’s daughter.

The merger of Cheil and C&T was opposed by activist Paul Elliott Singer and only succeeded by a narrow margin, thanks to the support of Korea’s National Pension Service.

Special prosecutors have arrested Moon Hyung-pyo, the former chairman of the pension service. Moon acknowledged that he pressured NPS officials to support the Samsung merger, special prosecutors said last month.

“Samsung wanted to be seen as a victim, but that’s now impossible because Lee is named as a suspect,” Chung said.

“When somebody is summoned as a suspect it means prosecutors have obtained definite evidence. — Bloomberg

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