South Korean police raid management office for Samsung family homes over alleged misuse of company funds

Samsung's showroom in Seoul. A Samsung office was raided in connection to accusations that its chairman and his family misappropriated company funds.
Samsung's showroom in Seoul. A Samsung office was raided in connection to accusations that its chairman and his family misappropriated company funds.PHOTO: AFP

SEOUL (Reuters) - South Korean police on Monday (Aug 7) raided a management office for residences of Samsung Electronics chairman Lee Kun Hee and his family over alleged misappropriation of company funds used to pay for interior renovations.

The move came hours before prosecutors demanded a 12-year jail term for Samsung Electronics vice-chairman Lee Jae Yong, who is Mr Lee's son, over bribery and other charges.

The younger Lee has been in detention since February, on trial for charges ranging from embezzlement to perjury, in a scandal that gripped the country for months and led to the ouster of former president Park Geun Hye.

Investigators seized documents on the renovations at the office located near the residences in central Seoul, police said.

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The company is suspected of having paid a home interior decoration firm cheques from accounts created under borrowed names, while demanding the firm not issue tax receipts for the work, carried out from October 2008 to March 2015, police said.

No individual suspect had been identified so far, a police official told Reuters separately.

 

A Samsung spokesman declined to comment, but referred to the company's statement in June that the expenses were paid by chairman Lee personally and receipts were issued.

In July, police raided the headquarters of Korean Air Lines as part of an investigation into the suspected use of corporate money for remodelling work at the home of airline chairman Cho Yang Ho.

A series of probes came after President Moon Jae In came to power in May on the back of promises to reform the opaque "chaebol" business empires, which dominate Asia's fourth-biggest economy.