Prosecutors zero in on Samsung bribery claims
Korean prosecutors pursuing bribery charges against Samsung heir Jay Y Lee have zeroed in on a five-minute chat with the country’s president as the start of a relationship that put both behind bars. By Sam Kim and Hooyeon Kim.
Korean prosecutors pursuing bribery charges against Samsung heir Jay Y Lee have zeroed in on a five-minute chat with the country’s president as the start of a relationship that put both behind bars.
The landmark trial of South Korea’s most powerful business figure focused on Wednesday on what transpired during a tête-à-tête in September 2014.
Prosecutors allege Lee accepted then-President Park Geun-hye’s request to support equestrian training for the daughter of a close friend, anticipating it would help secure government support for business deals.
But Lee’s lawyers said he couldn’t possibly have sought favours from Park during a quick conversation on the sidelines of a public event.
Lee’s hearing — dubbed the “trial of the century” in Korea — threatens to expose a murky web of ties between top government officials and the richest family in the country. On Wednesday, the billionaire stared quietly in front of him as his lawyers fought allegations that meetings with Park helped Lee engineer a 2015 merger that cemented control over Samsung Electronics.
As evidence, prosecutors produced a letter the conglomerate sent to a local lobbying group before the pivotal merger of Samsung C&T and Cheil Industries, opposed by Elliott Associates. In that memo, Samsung sought the lobbyists’ assistance, expressing fears of a hostile takeover by a foreign fund and citing “national interests”.
Both Lee and Samsung have denied wrongdoing.
Lee, the 48-year-old vice chairman of Samsung Electronics, has been detained since February on charges he embezzled corporate money to bribe Park’s friend Choi Soon-sil through gifts of millions of dollars and a horse for her daughter. Park, ousted from office last month, has also been detained on bribery charges. Both have denied the allegations.
The heir to the Samsung empire is among the most prominent figures implicated in a scandal that’s reached the highest levels of business and government. Lee’s ascension to the top of Korea’s biggest conglomerate has stalled as he remains in detention during the trial.
The world’s biggest maker of smartphones this month posted its best quarterly operating profit in nearly four years on the back of its workmanlike semiconductor and display units. Its latest marquee device, the Galaxy S8, began shipping this week. The Suwon, South Korea-based company said last week it had accepted more pre-orders for the gadget than its previous version, the S7.
Still, Lee’s detention may delay long-term strategic moves such as acquisitions and restructuring. The court proceedings are scheduled to end by late May under a law that fast-tracks cases initiated by a special prosecutor. — (c) 2017 Bloomberg LP