Samsung under scanner again as police raid offices
Barely two months after its crown prince was sent to prison on corruption charges, the family that controls Samsung’s vast business empire is again facing allegations of white-collar crime.
The South Korean police raided the head office of Samsung’s construction arm on Wednesday as they investigated whether Lee Kun-hee, the group’s patriarch, had misappropriated company funds to renovate his family’s home. Investigators will soon begin questioning others, including company officials, an officer involved with the investigation said.
The construction arm, a unit inside the Samsung C&T Corporation, said on Wednesday that it could not comment on a continuing police inquiry. It had previously disputed the allegations. The police officer, who asked not to be identified because he was not authorised to speak publicly, declined to disclose how much money investigators believe may have been involved.
The investigation follows the conviction in August of Lee’s son, Lee Jae-yong, 49, who is vice chairman of Samsung Electronics, the most profitable arm of the company. The younger Lee was sentenced to five years in prison for bribery. He has appealed the conviction.
The raid on Wednesday and the investigation behind it added to the uncertainty surrounding Samsung, South Korea’s biggest company and a global name in electronics and other industries. Samsung’s myriad businesses, which range from smartphones and memory chips to drugs and insurance, appeared to be running without major hiccups in recent months.
But the legal troubles of the family behind Samsung have renewed concerns in South Korea about the fate of the conglomerate, a major economic force in the country. The scrutiny also reflects public frustration with years of criminal charges leveled against the leaders of Samsung and some other big family-run companies that have led to light sentences and even to official pardons.
Lawmakers have also turned up the pressure. This week, Park Yong-jin, a member of South Korea’s governing Democratic Party and a vocal critic of the country’s corporate culture, dragged one of Lee Kun-hee’s two earlier convictions back into the limelight when he said that financial authorities had allowed the Samsung executive to inherit billions of dollars from his father without paying taxes.
South Korea would have reaped about $2 billion from the transaction, “if tax authorities had followed the rules and levied inheritance taxes,” Park said.