Credibility in Jeopardy

CJ Group may suffer from series of problems

By Kim Tae-gyu

CJ Group Chairman Lee Jay-hyun has grabbed the media attention once again, this time in a case involving his alleged meetings with one of the closest aides to President Lee Myung-bak at an exorbitantly expensive room salon.

Police reportedly documented meetings Lee had with Presidential Council for Future and Vision Chairman Kwak Seung-jun several times in the summer of 2009 at a hostess bar located in Cheongdam-dong, southern Seoul.

According to the documents, several “entertainers” served the two, who talked about a variety of pending issues including media-related regulations, while Lee covered all the costs amounting to tens of millions of won on average.

If the reports are found to be true, Lee is expected to face problems as Kwak is one of the confidants of President Lee, who is believed to have influence on various polices.

Because one of CJ’s main business segments is media and entertainment, their purported discussion topic of media-related laws may lead to suspicions. Plus, the money Lee spent at the ultra-expensive hostess bar is almost equivalent to the annual salaries of ordinary people.

When contacted, CJ Group said Lee and Kwak are close friends of the same age who have known each other since they were teenagers. They also entered the same ivory tower of Korea University.

However, the group contended that rumors that Lee lobbied Kwak were groundless.

``They are close friends who meet often. Accordingly, it does not make any sense that this is associated with lobbying,’’ a CJ Group official said.

He added that the group has no idea of where, when and with whom they got together.

The news comes on the heels of the ongoing conflict between Lee’s father Lee Maeng-hee and his uncle, Samsung Group owner Lee Kun-hee, two of the sons of Samsung Group founder Lee Byung-chull.

The former filed an inheritance lawsuit against the latter early this year claiming that he should receive his “proper share” of 710 billion won in Samsung stock he alleged his brother Kun-hee clandestinely incorporated into his assets.

Back then, some analysts presented a guess that CJ Group Chairman Lee would have something to do with the court action even though the 52-year-old flatly rebuffed the claims.

Lee Kun-hee inherited stocks in Samsung’s flagship affiliates after his father’s death in 1987 and managed them under borrowed names until this was discovered by the prosecution last year.

CJ Group has maintained that the conglomerate and its Chairman Lee are not associated with the court battle, arguing that it is a legal action between individuals.

Soon after the standoff started, Chairman Lee got involved at least indirectly _ the group filed a complaint with police late February that a Samsung official trailed its boss for almost a week.

Some CJ insiders insinuated that the illegal surveillance might be related to the inheritance lawsuit although Samsung countered the official at issue visited land around Chairman Lee’s residence in order to check out potential candidates for a development project.

Currently, the prosecution is looking into the case.

In the latest spin in the high-profile fight, Samsung tycoon Lee Kun-hee came up with very scathing remarks about his elder brother Lee Maeng-hee, who he denounced as an outcast of the family.

Samsung head Lee, the third son of Samsung founder, told reporters Tuesday that nobody accepts his brother as the eldest son.

``I have never seen him take part in a ceremony (for our late father).’’ In Korea, the eldest son is supposed to take charge of the ceremony to pray for the repose of his ancestors.