South Korea probe widens, 7 business leaders to be grilled

Investigators want to know if they donated to 2 foundations and received favours in turn

Ms Park and Kazakh President Nursultan Nazarbayev being greeted by children during a welcome ceremony in Seoul yesterday. Mr Nazarbayev is in South Korea to boost ties between the two countries, but the current political scandal is casting dark shado
Ms Park and Kazakh President Nursultan Nazarbayev being greeted by children during a welcome ceremony in Seoul yesterday. Mr Nazarbayev is in South Korea to boost ties between the two countries, but the current political scandal is casting dark shadows over Ms Park.PHOTO: EUROPEAN PRESSPHOTO AGENCY

SEOUL • Prosecutors are questioning top conglomerate heads as they widen the probe into a massive influence-peddling scandal that has rocked South Korea.

Local media reported that seven major business leaders would be questioned over one-on-one meetings they had with President Park Geun Hye in July last year.

The meetings were held to discuss plans for donations to two non-profit foundations set up by her confidante Choi Soon Sil, reported local media.

Korea Times reported that the prosecution will investigate whether President Park forced them to provide money to the foundations and whether they asked for business favours in return.

If so, Ms Park and the conglomerate heads could be subject to bribery charges.

  • Psy skips talk show amid alleged link to scandal

  • SEOUL • K-pop star Psy has reportedly postponed a planned appearance on a popular Korean talk show, over allegations that he is linked to an influence-peddling scandal involving a confidante of South Korean President Park Geun Hye.

    Psy, whose 2012 pop single Gangnam Style was a smash hit globally, is not directly connected to Ms Choi Soon Sil, the confidante.

    However, he has worked with artistic director Cha Eun Taek, an associate of Ms Choi's who was arrested at the airport on Tuesday, the Korea Times reported yesterday.

    Mr Cha directed music videos for Psy's digital single Hangover in 2014. While Psy's agency YG Entertainment said he had delayed his TV appearance on talk show Radio Star as he was busy preparing for a new album, many believe he wanted to avoid possible questions about his relationship with Mr Cha and Ms Choi.

    Mr Cha is also linked to YG Entertainment chief executive Yang Min Suk, who is said to have done several business deals with Mr Cha.

Yonhap News and Korea Herald said Samsung scion Lee Jae Yong, LG Group chairman Koo Bon Moo and Hyundai Motor Group chairman Chung Mong Koo are among the people under investigation.

Key executives from Samsung, Hyundai Motor, LG, SK, CJ, Hanhwa and Hanjin have already been summoned for questioning about allegations in connection with the scandal.

Most officials said they had no prior knowledge of the closed-door meetings with President Park, and those who did know about the meetings said they did not know what was discussed.

Public attention has been centred on whether prosecutors will investigate President Park. The leader said last Friday that she would accept an investigation into herself "if necessary".

She made her second public apology last week, but failed to appease the public.

Organisers of an anti-Park rally in Seoul tomorrow expect a turnout of 500,000. The rally will be the third massive demonstration of public anger against the South Korean leader since the scandal involving her long-time friend, Ms Choi, erupted late last month.

Prosecutors have charged Ms Choi with influence-peddling and abuse of power, accusing her of using her connections with Ms Park to coerce big companies into donating funds to the two foundations, Mir Foundation and K-Sports Foundation.

A former presidential aide has been arrested for helping Ms Choi to put pressure on the companies.

Chaebol watchdog Solidarity for Economic Reform said in a statement in September that Hyundai Motor Group donated 12.8 billion won (S$15.6 million) to the two foundations.

A Hyundai Motor spokesman declined to confirm the amount of the donation or to comment on the investigation.

Mir Foundation and K-Sports Foundation were launched by the Federation of Korean Industries, the country's largest lobbying group, to promote Korean culture and sports using donations from conglomerates.

Bloomberg reported that according to Solidarity for Economic Reform, the two foundations raised a total of 77.4 billion won, donated by 53 companies from 18 business groups.

Ms Choi led the launch of the two foundations, Hankyoreh newspaper reported last month, citing current and former employees at the organisations.

The prosecution suspects the money may have been illegally channelled to her, reported Korea Herald. Eight banks were raided last week as investigators sought financial details related to Ms Choi.

A version of this article appeared in the print edition of The Straits Times on November 11, 2016, with the headline 'South Korea probe widens, 7 business leaders to be grilled'. Subscribe