An independent counsel Thursday launched an investigation into Samsung Group in what was seen as a litmus test of whether South Korea is ready to crack down on shady business practices used by giant, family-owned conglomerates.
The high-profile probe comes after a former Samsung lawyer alleged in November that the company regularly bribed politicians, prosecutors and government officials. The National Assembly subsequently passed a bill initiating the independent probe into the country's biggest conglomerate.
Attorney Cho Joon-woong, a former senior prosecutor, launched the probe with a mandate of up to 105 days.
"Too many allegations are involved in the investigation, so I don't expect to get all of them clarified within the given time. But we will do our best to get as much done as possible," Cho told reporters.
Key investigations will center on whether Samsung amassed slush funds; peddled influence by routinely bribing government officials, the media and people in legal circles; and engaged in shady stock deals to pass control of the group from its chairman, Lee Kun-hee, to his only son, Jae-yong.
The probe may require the Samsung chairman be summoned to face questioning, which civic organizations have vehemently called for but has never been carried out. In 2005, when Lee faced a graft scandal linked to the 1997 presidential election, he flew to the United States and returned home five months later, only after prosecutors decided not to indict him, citing lack of evidence.
The special prosecutor evaded a direct answer, saying "It's only natural to summon someone if that's required for the investigation."
The independent counsel will also look into allegations that outgoing President Roh Moo-hyun's camp took congratulatory money from Samsung just after his election in December 2002.
Roh had initially opposed the special probe, saying it was an abuse of the legislature's power, but later signed the legislation, which passed in the National Assembly with bipartisan support.
Kim Yong-chul, the whistle-blower who worked at Samsung from 1997 to 2004 as an attorney, claimed he took part in creating over 7 trillion won ($7.5 billion) in slush funds until 2000 for Samsung. Kim described the conglomerate and the Lee family as a "force mixed with injustice."
With 58 affiliates in its group -- including Samsung Electronics Co., the world's biggest memory chip maker, and Samsung Heavy Industries, the world's No. 2 shipbuilder -- Samsung products account for nearly a quarter of South Korea's exports and gross national product.
Industry watchers say the Samsung probe will show whether South Korea is ready to eradicate shady practices used by powerful family-owned conglomerates, which became the country's economic backbone under the protective wing of past authoritarian governments.
In 2005, SK Chairman Chey Tae-won was sentenced to three years for an accounting fraud worth 1.9 trillion won ($2.05 billion). More recently, Hyundai Motor Chairman Chung Mong-koo received a five-year suspended jail term for embezzling more than $100 million in company money to set up slush funds.
Public opinion is torn between empowering the industrial growth engines with an amnesty and purifying them by holding them to global standards.