Korean conglomerates embroiled in bribery allegations are on alert after the embattled President Park Geun-hye was impeached in a parliamentary vote Friday.
Seven business moguls were included in the impeachment motion proposed by three opposition parties, on claims they donated money to the Mir Foundation run by Park’s close friend, Choi Soon-sil, after meeting with the president.
The motion also mentions Samsung C&T Corporation and its controversial merger with Cheil Industries, as well as SK and Lotte over government favors in relation to duty-free licenses.
“Considering the wide range of the president’s authority, a total of 36 billion won ($30.9 million) given by Samsung, SK and Lotte is viewed as bribery, as they have direct interest in succession, special pardons and duty-free business rights,” the motion said.
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South Korea's top business moguls shake hands with lawmakers while attending the National Assembly hearing Tuesday. (Yonhap) |
The outcome of the impeachment is expected to affect the upcoming independent counsel probe into the conglomerates’ alleged bribery. Prosecutors are slated to re-summon the business leaders to investigate whether the money was in return for favors.
“The possible prosecution of business heads by the special prosecutor will be critical to the companies,” said professor Chun Sung-in of Hongik University.
“If group chiefs are prosecuted for bribery, they may face challenges in holding on to financial affiliates by losing their eligibility as a major shareholder,” Chun added.
If the scandal involving the corporate and political nexus prolongs, this may also raise concerns over capital outflow among foreign investors, industry watchers said.
“As we are complying with the Principles for Responsible Investment, we are nervously watching whether we invested in companies involved in corruption as we may have indirectly helped the corrupted companies,” said Park Yoo-kyung, an executive of Netherlands-based asset management firm APG.
Since the presidential scandal first broke in late September, foreign investors have since sold Samsung Electronics stocks to the tune of 502 billion won.
By Shin Ji-hye (
shinjh@heraldcorp.com)
