Back To Top

Tycoons deny donation-for-favor suspicions

South Korea's business tycoons denied that their conglomerates donated money to two foundations in return for getting business favors when they attend a parliamentary hearing on Tuesday.

Samsung Group Vice Chairman Lee Jae-yong stressed that his conglomerate’s donation was not intended to earn business favors. 

Samsung's Lee Jae-yong
Samsung's Lee Jae-yong

The Samsung heir-apparent was questioned over allegations that the company received support from the National Pension Service for its controversial merger of two affiliates in 2015 in exchange for donations and favors to President Park Geun-hye's confidante Choi Soon-sil and her daughter.

Lee is one of the eight major business group chiefs who appeared before the National Assembly in line with the probe into a corruption and influence-peddling scandal involving President Park and Choi.

SK Group Chairman Chey Tae-won told lawmakers that there was a request to donate 8 billion won to K-Sports Foundation, but he refused to accept the offer as the proposal was deemed inappropriate.

Lotte Group head Shin Dong-bin also said he was not directly involved in the scandal.

The South Korean retail conglomerate provided 1.7 billion won and 4.5 billion won to the K-Sports and Mir foundations, respectively, last year. In May this year, Lotte also provided an additional 7 billion won to the K-Sports Foundation, which was returned a day before prosecutors raided Lotte's offices in June.

Shin said the decision to provide an additional 7 billion won was made by Lee In-won, the group's vice chairman and close aide of the incumbent chief, who was found dead in an apparent suicide late August while waiting for a summons by prosecutors on the group's alleged corruption.

Shin added the donation is not linked to the group's effort to win business rights to operate duty-free shops in Seoul.

The investigation centers on conglomerates' alleged behind-the-scenes deals with Choi  and whether the president pressured them to donate to two non-profit foundations - K-Sports and Mir.

Attending the session are the chiefs of Samsung, Hyundai Motor, SK, LG, Lotte, Hanwha, Hanjin and CJ.

Chaebol chiefs take an oath at a parliamentary hearing on the political scandal involving President Park Geun-hye on Tuesday. (Yonhap)
Chaebol chiefs take an oath at a parliamentary hearing on the political scandal involving President Park Geun-hye on Tuesday. (Yonhap)

In 2015, Samsung Group merged two of its affiliates despite opposition from overseas investors. The state pension fund operator, which held an 11.6-percent stake in then-Samsung C&T Corp. and a 5-percent stake in Cheil Industries Inc., supported Samsung although some minor shareholders opposed the move.

The merger was seen as a step toward paving the way for the heir-apparent to take control of the conglomerate amid his father's hospitalization. His father Lee Kun-hee has been in the hospital since May 2014 after suffering a heart attack.

During the parliamentary session, the junior Lee said the merger was not related to his succession, and claimed that it was only intended to benefit the companies.

"The NPS is the biggest investor of Samsung affiliates," Lee said. He was questioned over meeting officials from the NPS about the deal, even without having any shares in the former Samsung C&T.

Lee, however, admitted to providing Choi's daughter Chung Yoo-ra, a professional equestrian, with a horse valued at 1 billion won.

The Samsung heir-apparent said he will do his best to avoid being involved in such scandals in the future. Lee said he knew about Choi only recently.

The hearing is expected to affect the opposition-led impeachment vote against Park slated for Friday, political pundits said.

Park faces her biggest political crisis amid allegations that Choi exerted influence on state affairs without any seat in the administration based on her friendship with the president. (The Korea Herald & Yonhap)

MOST POPULAR
LATEST NEWS
leadersclub
subscribe