Friday 28 April 2017

The corporate trial of the century kicks off in Seoul

Jay Y Lee, co-vice chairman of Samsung Electronics, is escorted by police officers as he arrives at the special prosecutors' office for questioning in Seoul, South Korea
Jay Y Lee, co-vice chairman of Samsung Electronics, is escorted by police officers as he arrives at the special prosecutors' office for questioning in Seoul, South Korea

Yoolim Lee and Ju-min Park

Samsung Group leader Jay Y Lee will go on trial for bribery and embezzlement next Thursday, a court said, amid a corruption scandal that has rocked South Korea and led to the impeachment of its president.

Lee (48), the third-generation leader of the country's top conglomerate, was indicted on Tuesday on charges including pledging 43bn won (€35.2m) in payments to a confidant of President Park Geun-hye.

"We are preparing hard, thinking that the upcoming Samsung trial... could be the trial of the century that the entire world will be watching," special prosecutor Park Young-soo told reporters.

The Samsung scion's hearing will be held in a court that can accommodate more than 150 people, according to the Seoul Central District Court's court database.

Lee, who was arrested on February 17, was charged with bribery and embezzlement in a case that has dealt a blow to the standard bearer for Asia's fourth-largest economy.

Samsung Group declined to comment but has denied wrongdoing.

Among the charges against Lee are pledging bribes to a company and organisations tied to Park's confidant, Choi Soon-sil, the woman at the centre of the scandal, to cement his control of the smartphones-to-biopharma business empire.

The funding also included Samsung's sponsorship of the equestrian career of Choi's daughter, prosecutors say.

Legislation appointing the special prosecutor states that the trial should be finished in three months.

President Park (65), daughter of a former military strongman, has had her powers suspended since her impeachment by parliament in December.

Special prosecutor Park Young-soo has indicted 30 people in the investigation into corruption surrounding the nation's president.

Putting the heir to a $238bn empire behind bars, even temporarily, is the most high profile detention yet for Park, whose career includes arresting two other bosses of chaebol, the term for Korean conglomerates.

"This special prosecutor seems to not tolerate the chaebol whatsoever," Lee A-rum, a 25-year-old service-industry worker, said in Seoul. "Taking this opportunity, I hope society will become more just."

The 65-year-old prosecutor was appointed by President Park Geun-hye in November amid allegations of influence peddling that extended to her longtime confidante, Choi Soon-sil. Both have denied wrongdoing.

A former leader of the Seoul High Prosecutors' Office, he was among two candidates nominated by opposition parties in accordance with South Korean law.

"The public's desire is for the special counsel team to uncover the whole truth, and I intend to do just that and devote my everything to it," he said in December. Park, who isn't related to the president, had a history with the chaebol even before this latest investigation. In 2003, he uncovered accounting fraud at SK Group and arrested its chairman Chey Tae-won. Then, in 2006, he oversaw the probe into Hyundai Motor's slush funds, which led to the arrest of chairman Chung Mong-koo. Chey and Chung were both convicted and subsequently pardoned.

Park also investigated whether Dallas-based Lone Star Funds' acquisition of Korea Exchange Bank was at an undervalued price, though prosecutions against two former officials from the bank and the finance ministry failed. Lone Star wasn't charged with wrongdoing.

For all that, local media started calling him the "Chaebol Grim Reaper".

"Chaebol top tiers, they really don't think of themselves as having anything to do with ordinary Koreans," said Hank Morris, who has lived in South Korea for three decades and is an adviser for Argentarius Group, a financial services company.

"They think of themselves as kind of an elite tier, almost similar to what an aristocracy is in a monarch.''

Park was born in 1952 on the southern island of Jeju, the farthest place from the centre of power.

He graduated from Seoul National University with a degree in philosophy and then earned his master's degree in law at Korea University.

He started his career in 1983 in the Seoul city prosecutor's office. Early days involved busting gangsters, gamblers and drug traffickers.

He first entered the public arena in 1987, when he handled the investigation into the mass suicide of 32 members of a religious cult. (Reuters and Bloomberg)

Irish Independent

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