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(3rd LD) Samsung heir questioned as bribery suspect in influence-peddling scandal

All News 15:42 January 12, 2017

(ATTN: UPDATES with probe team's press briefing in paras 8, 10; ADDS more info in last 3 paras)
By Choi Soo-hyang

SEOUL, Jan. 12 (Yonhap) -- Samsung's heir apparent was questioned by investigators as a bribery suspect Thursday as special investigators in Seoul accelerated their probe into the influence-peddling scandal centered on President Park Geun-hye and her friend.

Lee Jae-yong, vice chairman of Samsung Electronics Co., appeared before the investigation team's office in southern Seoul to undergo questioning over suspicions the country's largest business group gave undue financial support to Park's friend Choi Soon-sil in return for business favors.

"I deeply apologize to the people for failing to show a positive image because of this incident," Lee said upon arrival, declining to comment further.

As he entered the building, surrounded by some hundreds of reporters, some protesters picketed and shouted "Arrest Lee Jae-yong!"

Samsung Electronics Vice Chairman Lee Jae-yong (C) is surrounded by reporters as he arrives at the investigation team's office in southern Seoul on Jan. 12, 2017. (Yonhap)

South Korea's largest family-run conglomerate is suspected of having struck a 22 billion-won (US$18.3 million) contract with a Germany-based firm owned by Choi and her daughter under the name of a consulting arrangement to fund the daughter's equestrian training.

There have been allegations that the contract was signed in return for the state-run pension fund's backing of a major merger deal between Samsung subsidiaries in 2015. Investigators are looking into whether the presidential office pressured the pension fund to support the merger in return for favors Samsung gave to Choi.

Moon Hyung-pyo, chief of the National Pension Service and former health minister, was formally arrested last month over his role in the merger deal.

When asked whether Lee can be charged with embezzlement or breach of trust for funding Choi with Samsung's money, the probe team's spokesman Lee Kyu-chul said they are "reviewing" the details.

Members of a minor opposition party protest in front of the office of the special investigation team in Seoul on Jan. 12, 2017, waiting for Samsung's heir apparent Lee Jae-yong to appear to undergo questioning over a corruption scandal involving President Park Geun-hye and her friend. (Yonhap)

Samsung also donated 20.4 billion won to two nonprofit foundations that may have been influenced by Choi, which is the largest amount given by any local business group.

Whether this money can be deemed as a kickback is under review, Lee, the spokesman said.

South Korean conglomerates that donated to the foundations said, for the most part, they were told by the presidential office that the money was to promote South Korean culture abroad and the sports sector, and there was no thought of getting anything in return. They said they were not in a position to shrug off the wishes of the president when she asked for help on the matter, hinting they were worried that rejecting the request could lead to repercussions.

Park was impeached by parliament for her supposed involvement in the scandal on Dec. 9.

During a parliamentary hearing held last month, Lee stressed several times that the group "never took part in the donation, seeking any kind of a benefit in return."

The independent counsel on Wednesday requested the parliamentary panel, which questioned the business tycoons during the hearing, to file a formal complaint against Lee for perjury.

With special prosecutors opening "the possibility" of seeking an arrest warrant against the Samsung scion later, some Samsung officials said they were worried about a leadership vacuum if Lee is arrested.

A Samsung official, who spoke on the condition of anonymity, said it is "hard to imagine" how Samsung's businesses would be affected if Lee is arrested.

Samsung has admitted that it made contributions to the foundations and the Germany-based firm set up by Choi, but denied allegations that such contributions were related to the 2015 merger.

Samsung also denied the allegation of bribery, repeatedly saying that the funds were the product of being "strong-armed" by those in power.

Lee became a board member of Samsung Electronics last October and his father, Lee Kun-hee, has been hospitalized since suffering a heart attack in 2014.

Samsung's heir apparent Lee Jae-yong (C) arrives at the office of the special investigation team in Seoul on Jan. 12, 2017, to undergo questioning. The country's largest conglomerate has been implicated in an influence-peddling scandal that has led to President Park Geun-hye's impeachment. (Yonhap)

Meanwhile, professor Kim Kyoung-sook at Seoul-based Ewha Womans University was questioned by investigators as a suspect over allegations the school gave undue favors to the daughter of Park's friend, Choi, in terms of admission and academic affairs.

The probe team, which has been accelerating its investigation, also arrested a former culture minister, a former vice culture minister and an ex-presidential secretary earlier in the day over their alleged role in drawing up and managing a "blacklist" of artists deemed critical of the government.

They are investigating whether it was actually used to restrict those on the list from receiving state sponsorship.


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