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(LEAD) Samsung Electronics leaves top business lobby amid scandal

All News 15:14 February 06, 2017

(ATTN: ADDS details in last 3 paras)

SEOUL, Feb. 6 (Yonhap) -- Samsung Electronics Co. on Monday announced its withdrawal of membership from the nation's top business lobby as the Federation of Korean Industries (FKI) was blamed for its role in a snowballing corruption scandal that led to the impeachment of President Park Geun-hye.

Samsung Electronics formally submitted a document of withdrawal to the FKI earlier in the day, the company said. Other affiliates of Samsung Group are expected to follow suit.

The move has been widely expected as Samsung Group's de facto leader, Lee Jae-yong, told lawmakers during a parliamentary hearing in December that the group would leave the FKI.

(LEAD) Samsung Electronics leaves top business lobby amid scandal - 1

Lee was spared detention last month, but Samsung is on alert as Lee and other top executives are facing questions over charges of bribery, embezzlement and others by special prosecutors investigating the scandal.

LG Group and KT Corp. announced their withdrawals from the FKI in December last year.

Prosecutors have charged Choi Soon-sil, a long-time friend of Park, with colluding with the president to strong-arm business conglomerates, such as Samsung and LG, to donate funds to the two foundations set up by Choi.

The FKI was criticized for playing a middleman between the presidential office and conglomerates.

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Samsung's 14 other affiliates, including Samsung C&T and Samsung Securities, are among the members of the FKI, which has about 600 member companies.

The four major conglomerates -- Samsung, Hyundai Motor, SK and LG -- accounted for about 77 percent of the FKI's annual membership dues worth 49.2 billion won (US$43.2 million) in 2015.

Samsung's 15 affiliates were believed to have paid a total of 13.3 billion won in annual membership dues to the FKI.

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