Go to Contents Go to Navigation

Slush-fund artworks found in Samsung warehouse

All News 09:45 January 24, 2008

SEOUL, Jan. 24 (Yonhap) -- An independent counsel investigating an alleged Samsung Group slush fund has discovered some expensive artworks that a whistle-blower claimed were purchased with money from the fund, an investigator said Thursday.

The discovery may help the investigators verify the allegations made by a former Samsung lawyer, Kim Yong-chul, whose accusations initiated the investigation.

Kim, who worked for Samsung from 1997 to 2004, said in November that the conglomerate amassed 7 trillion won (US$7.5 billion) in slush funds through accounting manipulation and regularly bribed government officials, prosecutors and the media. To support his allegation of a secret fund, he presented a list of about 30 artworks that the family of Samsung Group Chairman Lee Kun-hee allegedly purchased at Christie's, a leading auction house in New York, with some of slush funds.

Agents of the independent counsel team found thousands of artworks in their two-day raids on Samsung's storehouses south of Seoul early this week. Among them were a few of the artworks in question, the investigator of the team said on condition of anonymity.

"We can't tell you in detail how many there are and what they are, but it's not that there are none," he said.

The storehouses are located near Everland, South Korea's largest amusement park and a Samsung affiliate, in Yongin, Gyeonggi province.

But the search failed to locate the two pieces most talked about because of their price, Yun Jung-sok, an investigator and spokesman for the independent counsel team, said earlier.

"Bethlehem's Hospital" by American minimalist painter Frank Stella valued at about 10 billion won (US$10.5 million) and "Happy tears" by American pop artist Roy Lichtenstein at 9 billion were not in the storehouses, Yun said.

Hong Ra-hee, the wife of the Samsung Group chairman and director general of the Leeum Samsung Museum of Art, has been accused of using US$64 million from Samsung's alleged slush funds to purchase artworks. "Happy Tears," a comic-book style painting of a smiling red-haired woman with tears running from her eyes, was sold for US$7.1 million at Christie's New York to an anonymous bidder in 2002, according to Christie's report at that time. It is not known whether the anonymous bidder was Hong.

Also included in the 30 coveted artworks are: "White Fire" by Barnett Newman, "Untitled" by Donald Judd and "Portrait of Nick Wilder" by David Hockney.

The investigators were studying the artworks, which were not confiscated but videotaped or photographed for consultations with experts.

Suspicions have mounted that Samsung hid evidence ahead of the raids. Surprise searches conducted of Lee Kun-hee's house and private office last week produced little evidence, the investigators said earlier.

A petition was filed by a group of lawyers and civic activists accusing Samsung of hiding evidence.

The Samsung affiliates "sent a 'security directive' to all their firms that all pertinent documents and data should be destroyed so as to clear major shareholders and senior executives from possible charges," said the joint complaint filed by two progressive organizations, Lawyers for a Democratic Society and People's Solidarity for Participatory Democracy.

Observers say South Koreans are torn between hopes that Samsung will enhance the transparency of its management, and concerns that its global reputation will be damaged.

Samsung accounts for nearly a quarter of South Korea's exports and gross national product. Among its 59 affiliates are Samsung Electronics Co., the world's biggest memory chip maker, and Samsung Heavy Industries, the world's No. 2 shipbuilder.


Send Feedback
How can we improve?
Thanks for your feedback!