Vice-Chairman Lee Jae-yong of Samsung Electronics had to show up to Special Prosecutor Park Young-soo’s office on the 12th as a possible suspect.
Vice-Chairman has come under a suspicion of giving bribes to President Park Gun-hye and Choi Soon-sil and is accused of suspicion of giving false testimony at National Assembly’s hearing. If Vice-Chairman Lee is indicted, it will bring huge shock to South Korea’s economy that is supposed to lead Industry 4.0 and Samsung Group as well.
Vice-Chairman Lee arrived at the office of Special Prosecutor Park, which is located in Gangnam, on the 12th at 9:28 AM. “We are truly sorry to citizens in South Korea for not giving a good impression with this situation.” said Vice-Chairman Lee at a photo line before heading into the office.
Vice-Chairman Lee was also summoned by a special prosecutor in 2008 due to a suspicion of giving away Everland’s stocks at dirt price. Vice-Chairman Lee, who was an executive director of Samsung Electronics at that time, was acquitted due to lack of evidences. On the other hand, Chairman Lee Kun-hee was indicted without detention for suspicions of resorting to expedient in giving away Everland’s convertible bonds and issuing Samsung SDS’s bonds with warrant at cheap price. Due to this indictment, he stepped down from Samsung’s management.
Samsung took a hit to its image just by having Vice-Chairman Lee summoned as a possible suspect. Absence of Vice-Chairman Lee in management is possible depending on whether or not he is indicted. Samsung is facing its worst situations due to this situation along with discontinuation of Galaxy Note 7.
Team led by Special Prosecutor Park investigated Vice-Chairman Lee of whether or not he gave bribes to Choi Soon-sil’s family and whether or not he received compensation while he was being succeeded in a ranking of Samsung Group’s management. Samsung gave $17.3 million (20.4 billion KRW) when Mir and K Sports Foundation, which are owned by Choi Soon-sil, were being established and gave 2.8 million euros ($2.98 million) to WIDEC SPORTS, which is established in Germany by Choi Soon-sil and her daughter Jung Yoo-ra. Korea Equestrian Federation, which has Samsung Group as its ‘chairman‘, once set up a roadmap that it will support dressage, which is Jung Yoo-ra’s sport, with $15.8 million (18.6 billion KRW) until 2020.
Samsung is taking a stance that it had no choice but to support them due to pressures from Senior Secretary An Jong-beom to the President for Economic Policy. It is heard that just like how Vice-Chairman Lee expressed Samsung Group’s situations at National Assembly’s hearing, he also emphasized to special prosecutor that Samsung Group is a victim of threat and pressure.
Previous to Vice-Chairman Lee, Special Prosecutor Park summoned Department Head (Vice-Chairman) Choi Ji-sung of Samsung Group’s Future Strategy Office and Deputy Department Head Jang Choong-ki of Samsung Group’s Future Strategy Office and investigated them for about 20 hours. It is heard that Samsung has set up solutions in order to prepare for worst situation of not having chief executive of its management depending on development of this investigation.
As level of investigation by special prosecutor is getting higher than expectations, other groups such as SK and Lotte have become very alarmed.
“It is difficult to focus on management due to investigations by special prosecutor.” said a representative for a financial industry. “This situation is not only causing a setback for establishment of strategies for this year’s businesses but operation of a company itself as well.”
Staff Reporter Sung, Hyeonhee | email@example.com