Samsung chief refutes bribery allegations

(Front row, from left) Mr Sohn Kyung Shik of CJ Group, Mr Koo Bon Moo of LG Group, Mr Kim Seung Youn of Hanwha Group, Mr Chey Tae Won of SK Group, Mr Lee Jae Yong of Samsung, Mr Shin Dong Bin of Lotte Group, Mr Cho Yang Ho of Hanjin Group and Mr Chun
(Front row, from left) Mr Sohn Kyung Shik of CJ Group, Mr Koo Bon Moo of LG Group, Mr Kim Seung Youn of Hanwha Group, Mr Chey Tae Won of SK Group, Mr Lee Jae Yong of Samsung, Mr Shin Dong Bin of Lotte Group, Mr Cho Yang Ho of Hanjin Group and Mr Chung Mong Koo of Hyundai take an oath during a hearing on the influence-peddling probe at the National Assembly yesterday.PHOTO: EUROPEAN PRESSPHOTO AGENCY

He denies donations worth $24m were made for political favours

Samsung Group's de facto chief Lee Jae Yong has refuted allegations of bribery in return for government favours, in a rare public grilling of some of South Korea's powerful tycoons in connection with a widening influence-peddling scandal involving President Park Geun Hye.

The televised parliamentary probe came as Ms Park met two leaders of the ruling Saenuri party yesterday and told them she was prepared to accept the result of an impeachment vote on Friday.

If lawmakers vote to impeach her, Ms Park will be stripped of her power while the constitutional court deliberates over the next few months whether to uphold the motion.

  • HOW MUCH THE FOUNDATIONS RECEIVED

  • SAMSUNG GROUP

    Main business: Electronics, construction, retail, hotel Vice-chairman: Lee Jae Yong

    Samsung donated more than 20 billion won (S$24.3 million) to Mir and K-Sports, the foundations set up by Choi Soon Sil. It allegedly bought a horse for her daughter and sponsored her training.


    HYUNDAI MOTOR GROUP

    Main business: Car manufacturing Chairman: Chung Mong Koo

    Hyundai donated 6.8 billion won to Mir and 4.3 billion won to K-Sports.


    LOTTE GROUP

    Main business: Hotel, shopping malls, confectionery, chemicals Chairman: Shin Dong Bin

    Its duty-free subsidiary gave 2.8 billion won to Mir, and its chemical arm gave 1.7 billion won to K- Sports.


    LG

    Main business: Electronics, telecommunications, chemicals Chairman: Koo Bon Moo


    LG

    reportedly gave 6.8 billion won to Mir and 4.3 billion won to K-Sports.


    SK GROUP

    Main business: Petroleum, telecommunications, chemicals Chairman: Chey Tae Won

    SK contributed 11.1 billion won to the foundations.


    HANJIN GROUP

    Main business: Shipping and airline (it owns Korean Air) Chairman: Cho Yang Ho

    Hanjin reportedly offered 1 billion won to the two foundations.


    CJ GROUP

    Main business: Food and entertainment Co-chairman: Sohn Kyung Shik

    CJ donated 1.3 billion won to the two foundations.


    HANWHA GROUP

    Main business: Finance, energy, chemicals Chairman: Kim Seung Youn

    Hanwha reportedly contributed 2.5 billion won to Mir and K-Sports.


    GS GROUP

    Main business: Energy (it owns Caltex), retail, convenience stores Chairman: Huh Chang Soo

    Mr Huh, as head of a chaebol lobby group, raised nearly 80 billion won from 53 companies.

In Parliament yesterday, Mr Lee drew the most questions from 18 lawmakers as Samsung, compared with others like Hyundai Motor, Lotte Group and LG Group, had made the biggest donation of some 20 billion won (S$24.3 million) to two non-profit foundations, Mir and K-Sports, set up by Ms Park's close friend Choi Soon Sil.

Mr Lee, vice-chairman of Samsung Electronics, said he never ordered donations to be made in return for political favours and rejected allegations that the money was given in return for government support to push through a controversial merger of two Samsung units.

What started as Choi meddling in state affairs for her own gain has snowballed into the country's biggest political scandal. Millions have joined protests every weekend to demand Ms Park's immediate resignation.

 

Samsung allegedly spent billions of won to buy a horse for Choi's daughter, a national equestrian, and sponsored her training in Germany. Asked more than once why Samsung would support an equestrian ranked No. 563 in the world, Mr Lee could not give a clear answer. Instead, he claimed he does not always know the details of Samsung's sponsorship commitments and lamented that "it's regrettable the process was not transparent enough".

He also dodged questions linked to Choi, such as whether he knew her personally, and when he got to know about her.

But he did say he would "take responsibility for what I am responsible for", and that his company would scrutinise all future donations to avoid suspicion.

Mr Lee was one of nine chaebol, or conglomerate, bosses summoned to the national assembly to clarify why their companies made donations to Mir and K-Sports.

Others included Hyundai Motor chairman Chung Mong Koo, Lotte chairman Shin Dong Bin, and SK chairman Chey Tae Won.

Most of them claimed they made the contributions with no strings attached, but some hinted they had been pressured to do so.

"It is difficult for companies to reject a request from the Blue House," GS Group chairman Huh Chang Soo told the lawmakers.

Yesterday was the first time these publicity-shy top executives had been brought together as witnesses in Parliament, although some of their predecessors had also been summoned to Parliament in 1988 for a probe into a foundation that was started as a slush fund for former president Chun Doo Hwan.

Analysts said yesterday's televised probe, which showed some tycoons looking rattled at times, could be cathartic for South Koreans fuming over the scandal.

But the tycoons' obviously well- rehearsed denials and non-committal replies made it hard for lawmakers to pin any blame on them.

Dr Hyunju Kang, research fellow at local think-tank Korea Capital Market Institute, said the hearing would make no difference to corporate governance or Friday's vote.

"The chaebol bosses denied the possibility of bidding (to the government), as expected. They agreed on the necessity of improving corporate governance and reforming the chaebol lobby group, but they've always answered in this way."

A version of this article appeared in the print edition of The Straits Times on December 07, 2016, with the headline 'Samsung chief refutes bribery allegations'. Print Edition | Subscribe