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Trial of Samsung's Lee begins; Lotte chief Shin grilled

PUBLISHED : April 07, 2017 - 17:30

UPDATED : April 07, 2017 - 17:30

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[THE INVESTOR] A Seoul court on April 7 began the trial of the country’s most prominent businessman -- Samsung Group’s de facto chief Lee Jae-yong -- on bribery charges in connection with the scandal that removed President Park Geun-hye from power.

On the same day, prosecutors asked for an extension of the arrest of the ousted president and questioned another business tycoon on a similar allegation -- providing donations to foundations allegedly controlled by Park’s longtime friend Choi Soon-sil. 


The investigators suspect Lee and Shin offered bribes, not donations, to Choi, Park’s friend of 40 years, expecting political favors from the Park administration.

At the courtroom on April 7, Lee, vice chairman of Samsung Electronics, denied the accusation.

Handcuffed and wearing a gray suit, the heir and only son of Samsung Group chairman attended the first hearing of his trial at the Seoul Central District Court, along with four other executives from the conglomerate facing the same charges.

“We secured enough evidence to prove that Lee sought favors from former President Park to achieve a smooth transfer of power and tighten his control on the Samsung Group,” Special Counsel Park Young-soo said during the hearing.

Lee was arrested in February on suspicions he gave or promised to give 43.3 billion won ($38.2 million) in kickbacks to Choi for her private interests.

The prosecution suspects Lee of using the company money to make donations for a winter sports center and the K-Sports and Mir foundations, all allegedly controlled by Choi, and sponsoring Choi’s daughter and equestrian Chung Yoo-ra for overseas training and the purchase of horses.

“The case is a typical form of cozy relations between politicians and businessmen to pursue private benefits. Our probe did not target Samsung Group, but its chief Lee and Choi Soon-sil and president who are associated with him,” he said.

In return for Samsung’s financial support, the ousted Park is suspected of using her power to ease regulations, revise relevant laws and pressure a state-run agency to back a controversial merger of two key Samsung units. The merger was a crucial step for the company’s smooth transition of leadership from its ailing chairman Lee Kun-hee to his only son Lee Jae-yong.

“Without the president’s help, it was impossible to achieve a smooth transition of power,” the prosecution said during the hearing, adding the bribery links were formed through three face-to-face meetings between Park and Lee from 2014 to 2016.

Lee, through his lawyers, said that Samsung Group made the donations for the K-Sports and Mir foundations under pressure from Park. He did not know who Choi Soon-sil was and that she was behind the foundations, his lawyers said.

“It may sound convincing at a glance, but the prosecution (forcibly) made a framework to make it look like the donations were in return for Samsung’s power transfer,” one of his lawyers said.

Lee’s lawyers took issue with the prosecution’s indictment, saying there is no solid evidence to back Lee’s charges and it is only based on prosecutors’ assumptions.

As Park was arrested on March 31 on charges including bribery and abuse of power, the prosecution has focused on investigating former presidential secretary Woo Byung-woo and other local firms that contributed money to the Mir and K-Sports foundations.

Shin Dong-bin, chairman of retail giant Lotte Group, appeared at the Seoul Central District Prosecutors’ Office on April 7 morning to be grilled.

The prosecution is looking into whether the donations Lotte made for the Choi-controlled foundations were bribes in return for a favor in the company’s bid for a business license for its duty-free shop.

Woo, who is suspected of abetting or condoning Choi’s meddling in state affairs and exerting undue influence under the Park administration, was grilled at the prosecution’s office a day earlier.

Park is under suspicion that she colluded with Choi to extort donations worth 77.4 billion won from local firms to help Choi’s business interests. The Constitutional Court removed her from office over her role in Choi’s manipulation of power on March 10, which stripped her of presidential immunity to criminal investigation. 

Park has so far been questioned twice in jail over corruption allegations. The prosecution on April 7 requested her detention to be extended for another 10 days until April 19. The prosecution will grill her again inside the Seoul Detention Center, where she is in custody, on April 8, it said. 

By Ock Hyun-ju/The Korea Herald (laeticia.ock@heraldcorp.com)

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