Leaders of Samsung, Hyundai, SK face probe over Choi scandal
By Lee Hyo-sik
Samsung, Hyundai Motor, SK and other conglomerates are on alert over the prosecution’s expanding investigation into the nature of their donations to two scandal-ridden foundations set up by Choi Soon-sil, a confidant of President Park Geun-hye.
The prosecution’s raid of Samsung Group, Tuesday, which has been suspected of offering billions of won to Choi’s daughter, signaled that other conglomerates will not be able to avoid the widening probe.
The prosecution told reporters that it will summon and question top officials from business groups, following the revelation that they met with President Park behind closed doors last year.
Park allegedly asked the business tycoons to provide tens of billions of won to the Mir and K-Sports foundations. It is also suspected that some chaebol heads may have demanded undue favors from the government in return.
The prosecution has reportedly secured testimony from former senior presidential secretary for policy coordination Ahn Jong-beom that the President held a meeting with the heads of the top eight business groups at Cheong Wae Dae in July last year.
Ahn has been detained by investigators on charges of abusing his position and exerting undue influence to force businesses to “make a contribution” to the Mir Foundation and the K-Sports Foundation.
He reportedly told prosecutors that Park initially held a private meeting with Samsung Electronics Vice Chairman Lee Jae-yong.
On July 24 and 25, 2015, she also met with Hyundai Motor Chairman Chung Mong-koo; LG Group Chairman Koo Bon-moo; SK SUPEX Council Chairman Kim Chang-geun; Lotte Group Chairman Shin Dong-bin; Hanwha Group Chairman Kim Seung-yeon; CJ Group co-Chairman Sohn Kyung-shik; and Hanjin Group Chairman Cho Yang-ho.
In the one-on-one meetings, the President allegedly asked the eight chairmen to donate money to the foundations.
To confirm the allegations, investigators are moving to call in business leaders for questioning. They will also question them over whether they made “deals” with President Park in exchange for making donations, seeking help from the government in resolving pending issues.
At the time, SK was desperate to have its Chairman Chey Tae-won and Vice Chairman Chey Jae-won be freed from jail, while Lotte’s sibling feud over control of the group was at its peak. CJ was also trying to get its ailing Chairman Lee Jay-hyun out of prison, with Hanwha scrambling to have Chairman Kim pardoned.
“If President Park demanded business heads donate money to the Mir and K-Sports Foundations, it would be impossible for them to refuse such a request,” said an executive at one of the country’s major business associations, who declined to be named.
“Unfortunately, evidence points to the fact that the President actually met business tycoons in private and asked them to provide funds. But it still remains to be seen whether the leaders asked for favors in return,” the executive said. “I hope the prosecution’s investigation into businesses ends as soon as possible to minimize its adverse effects on corporate activities.”
When contacted by The Korea Times, officials at the eight business groups all refused to confirm whether their leaders met with Park behind closed doors. They said there is no way for them to verify the allegations, expressing concerns about the prosecution’s expanding probe into their companies.
“I am not aware of anything related to the prosecution’s investigation into the Choi scandal,” an SK official said. Officials at Hyundai Motor, Hanwha, Hanjin and other conglomerates all refused to comment on the issue, citing its sensitive nature.
The 19 business groups, which raised a combined 48.6 billion won ($42.2 million) for the Mir Foundation and 28.8 billion won for the K-Sports Foundation, have argued that they voluntarily gave money at the request of the Federation of Korean Industries (FKI). The groups said they were told that the money would be used to finance diverse cultural and sports-related projects.