미분류

Samsung embroiled in political scandal

By 김영원
  • Published : Oct 21, 2016 - 17:41
  • Updated : Oct 21, 2016 - 23:43
[THE INVESTOR] Samsung Group is under fire for its alleged involvement in a controversial political scandal surrounding President Park Geun-hye and her dubious acquaintances.

Chosun Ilbo, a local daily, reported on Oct. 21 that Samsung has allegedly offered support to former national equestrian athlete Jeong Yoo-ra, the daughter of Park’s long-term confidant Choi Soon-sil.




Choi is said to be a power broker who allegedly peddles her influence, utilizing her close connection with the president, in making political decisions.

She is also accused of arm-twisting major conglomerates, including Samsung, LG and SK, to make financial contributions, worth 80 billion won (US$70.4 million), to the Mir and K-Sport Foundations -- bogus organizations set up in October last year allegedly by Choi to promote Korean culture and sports.

The news report comes amid other controversies faced by the nation's largest conglomerate and its crown jewel Samsung Electronics. 

While a leadership transfer from Chairman Lee Kun-hee to his only son and Samsung Vice Chairman Lee Jae-yong is imminent, activist hedge fund Elliott Management is calling to modernize the company, asking support from other shareholders.
  
The ongoing recall of the company's fire-prone Galaxy Note 7 is expected to wipe more than 3 trillion won off from the company's earnings in the coming months.

The allegations on Samsung’s relations with Choi and her daughter are gaining ground as the conglomerate has been closely related to Korea’s equestrian sports.

Samsung Electronics President Park Sang-jin, who is in charge of building a rapport with other businesses and politicians, is currently serving as a chairman of the Korean Equestrian Federation while Samsung Group is a member, which gives credit to allegations that support for Jeong is aimed at political favors.

Samsung’s heir apparent and his sister Lee Boo-jin used to be avid horseback riders with the former having served as a national equestrian player from 1989 to 1992.

Samsung Group said the allegations of the conglomerate’s inappropriate support for Jeong are groundless as "it has not run an equestrian team since the disbandment of the one in 2010."

The controversy, if confirmed, will likely put the conglomerate on the hot seat for misusing money from investors at a shareholders' meeting of Samsung Electronics scheduled on Oct. 27.

The appointment of the junior Lee as a registered board member will be put to a vote at the meeting. The appointment is considered a prelude to the power succession of the Lee family.

By Kim Young-won (wone0102@heraldcorp.com)