April 19, 2024

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[THE INVESTOR] Samsung Electronics Vice Chairman Lee Jae-yong reportedly said the conglomerate was forced by President Park Geun-hye to offer financial support to Choi Soon-sil, a key figure in the corruption scandal that has been rocking the nation.

The Samsung heir apparent made the confession during an interrogation session Thursday, in which he was questioned for about 22 hours.

Lee Jae-yong, Samsung Group vice chairman

Lee, however, denied most of the other allegations, including collusion with Choi for approval of the merger between two of the conglomerate’s affiliates in 2015.

His recent claim differs from what he said during a parliamentary hearing in December last year. Samsung’s de facto leader said at the time he and President Park only discussed matters related to the conglomerate and its investment plans in a meeting.

“The interrogation session has lasted longer than anticipated, as Samsung Vice Chairman Lee’s claims were not in accord with what the investigators had expected,” said Lee Kyu-chul, an official from the independent counsel team, in a media briefing, citing some of his statements during the interrogation also did not match claims by Samsung’s executives involved in the scandal.

“Those who lie at a parliamentary hearing can face a charge of perjury,” the official added.

The investigation team has decided to seek an arrest warrant for Samsung Group heir Lee and his top aides over the weekend, as the laws stipulate those who provide bribes, even under threats, are still subject to punishment.

Lee is suspected of having ordered Samsung’s top executives to fund dubious organizations run by Choi and her daughter’s equestrian training in return for business and political favors.

A longtime friend of President Park, Choi allegedly exerted influence over state-run organizations, in particular the National Pension Service, to help bring about the landmark merger in July 2015 between the conglomerate’s two affiliates Samsung C&T and Cheil Industries.

The merger had faced strong opposition from some investors, including US hedge fund Elliott Management. Some critics had claimed the merger -- done through a stock swap transaction with an “unfair” ratio of 1:0.35 -- undermined the shareholder value of C&T, and was only aimed at enhancing Lee’s control over the de facto holding company of the conglomerate. 

Before the merger, Lee held a 23.24 percent stake in Cheil Industries and 1.4 percent in C&T.

From August 2015 to September 2016, Samsung offered 8 billion won ($6.82 million) to Core Sports, a bogus organization owned by Choi, as part of a consulting contract worth 22 billion won.

Korea’s largest conglomerate also offered 1.6 billion won to a youth sports club run by Choi’s niece Chang Si-ho and contributed 20.4 billion won in total to the Mir and K-Spots foundations, which had been set up by Choi.

Other Korean conglomerates including LG Group and Hyundai Motor Group made similar contributions to the two foundations.

When Lee testified at the December parliamentary hearing last year, he said that “Samsung did not intend to provide financial support for Choi and her family.”

Claiming that Lee lied under oath, the prosecutors from the independent counsel team have recently requested lawmakers file charges against the Samsung vice chairman for perjury.

Park Sang-jin, a Samsung president who is in charge of the firm’s corporate relations, was also summoned by prosecutors for questioning Thursday.

Along with other Samsung executives including Choi Gee-sung and Chang Choong-ki, the Samsung president is accused of having orchestrated a series of schemes to provide financial support for Choi and her family. 

By Kim Young-won (wone0102@heraldcorp.com)