Samsung’s top brass grilled over Choi scandal

The independent counsel investigating the presidential scandal Monday grilled top executives of South Korea’s largest conglomerate Samsung, with reports suggesting the team may consider charging the group’s de facto leader Lee Jae-yong with perjury.

Choi Gee-sung, head of Samsung Group’s control tower Future Strategy Office, and deputy head Chang Choong-ki were summoned as witnesses by the special investigation team led by Park Young-soo in the morning.

Both Chang and Choi are considered the group’s No. 2 men and close aides to Samsung Electronics Vice Chairman Lee Jae-yong.

While entering the investigators’ office separately, Chang and Choi did not answer questions asked by reporters.

They were called in as testifiers, but their statuses could change to that of suspects in the course of the interrogation, according to an independent counsel official.

Lee Kyu-chul, spokesperson for the special investigation team told reporters that “theoretically, it is possible to issue arrest warrants for (Choi and Chung) at this stage, but nothing has been decided yet.”

Lee said they could face cross-examination, as they were summoned on the same day.

The investigators aim to prove the nature of the relationship between Samsung and Choi Soon-sil -- President Park Geun-hye’s confidante who is at the center of the scandal -- and whether there were any political favors in exchange for supporting foundations run by Choi, and a merger of the group’s two affiliates in 2015.

Choi refused for the fourth time to appear for the interrogation by the investigators, citing the ongoing Constitutional Court trial on President Park’s impeachment that she had been requested to attend as a witness. Choi’s legal representative, however, said later in the day that she would also not be appearing at the Constitutional Court trial slated for Tuesday. Choi currently faces her own criminal charges.

Samsung had signed a consulting contract worth 22 billion won ($18 million) with a paper company Choi set up in Germany and wired 3.5 billion won to it. It also provided horses worth 4.3 billion won to be used for the equestrian lessons of Choi’s daughter. The group also made donations of 20.4 billion won -- the largest among the country’s major conglomerates -- to foundations backed by Choi, along with a separate contribution of 1.62 billion won to the Korea Winter Sports Elite Center established by Choi’s niece Chang Si-ho.

Investigators suspect that Samsung made these contributions in return for favors for a controversial merger of Samsung affiliates, a crucial step for Lee Jae-yong to consolidate power.

The National Pension Service, then the largest shareholder of Samsung C&T, had supported the merger of the company with Cheil Industries, despite strong opposition by individual shareholders led by US hedge Fund Elliott Associates.

Depending on the findings of the investigation team, Samsung and President Park could face bribery charges.

In addition, the investigators are reportedly looking to press charges against Samsung’s Lee for giving false testimony at a parliamentary hearing last month during which the tycoon denied most of the allegations raised against the company and him.

The investigators have reportedly secured evidence against Lee’s testimony, according to Korean news reports. Lee had acknowledged meeting President Park but had denied discussing the merger or donations to Choi’s foundations.

But the independent counsel is reportedly combing through evidence, such as private memos kept by former Senior Presidential Secretary An Chong-bum, which could shed light on the actual discussion agenda between Park and Lee during their one-on-one meetings in July 2015 and February last year, the news reports said.

Samsung Group is at the center of the ongoing investigation. On Friday, Lim Dai-ki, CEO of Cheil Worldwide Inc., an advertising affiliate of Samsung, was questioned.

After questioning top executives, the investigators are expected to call in Lee Jae-yong for investigation. He is banned from leaving the country, along with other tycoons including Lotte Group Chairman Shin Dong-bin, SK Group Chairman Chey Tae-won.

The special counsel team said no schedule has been fixed for Lee’s questioning.

By Park Ga-young (gypark@heraldcorp.com)