Pension fund chief grilled over Samsung's merger deal

By 임정요
  • Published : Dec 27, 2016 - 10:41
  • Updated : Dec 27, 2016 - 14:10

The chief of South Korea's state-run pension fund was questioned by investigators looking into the scandal surrounding President Park Geun-hye and her friend Tuesday over allegations he unlawfully influenced a decision to back Samsung Group's merger plan last year.

Moon Hyung-pyo, chief of the National Pension Service, appeared before the special probe team's office in southern Seoul to undergo questioning over suspicions he played a role in the merger plan of the country's largest family-run business group while working as the health minister.

Moon Hyung-pyo, head of the National Pension Service, arrives at the independent counsel's office for questioning in Seoul on Dec. 27, 2016. Moon, former welfare minister, is suspected of influencing the pension fund's decision to support a controversial merger last year between Samsung Group affiliates. The decision is being investigated as a possible barter for Samsung Group's donations to foundations operated by the president's confidante. (Yonhap)

He led the Ministry of Health and Welfare from December 2013 to August 2015, before becoming the head of the pension fund late last year.

There have been allegations the presidential office Cheong Wa Dae pressured the state fund -- which held an 11.6 percent stake in Samsung C&T Corp. and a 5 percent stake in Cheil Industries Inc. -- to support the conglomerate in return for favors Samsung gave to the president's close friend Choi Soon-sil.

Choi, currently in custody, is under trial over a string of corruption charges where President Park was named accomplice by state prosecutors. Park who refuted all charges leveled against her is awaiting the Constitutional Court's decision on her impeachment after the parliament voted to oust her on Dec. 9.

Moon has been denying the suspicions raised against him, saying he did not have any contact with the presidential office or Samsung regarding the deal beforehand.

"As far as I know, we have explained our stance multiple times," Moon told reporters before entering the office. "I will fully cooperate with the interrogation."

He declined to comment further.

Last year, then Samsung C&T, the group's construction arm, successfully merged with Cheil Industries, which was then the de facto holding firm of the conglomerate.

At the time, Samsung had faced strong challenge from individual shareholders, led by U.S. hedge fund Elliott Associates, over the merger plan. The deal was widely seen as an attempt to smoothly transfer power from group owner Lee Kun-hee to his son, Jae-yong.

The NPS' backing for the merger drew criticism as its decision was not reviewed by an independent panel, which generally advises the state fund in exercising voting rights for invested firms.

Also Tuesday, the investigators questioned former Vice Culture Minister Chung Kwan-joo over suspicions he was involved in creating a "blacklist" of cultural figures who are critical of the government, while he worked as a presidential secretary from late 2014 to early this year.

The investigation team said the two were summoned to bear witness to each case but added their status can change to that of a suspect following the probe.

The special prosecutors also demanded An Chong-bum, former senior presidential secretary for policy coordination, appear at their office Tuesday, but he declined, citing health issues.

An is currently standing trial, along with Choi and Jeong Ho-seong, ex-senior secretary for private presidential affairs, for their involvement in the alleged corruption and influence-peddling scandal that has been rocking the country since late October.

The investigation team said it has again asked An to undergo questioning later in the day.

It also summoned Choi to appear before the investigators Tuesday, but she too refused. (Yonhap)