Samsung saddled with Park scandal
‘Equestrian princess’
SEOUL, Dec 30, (Agencies): Samsung Electronics Co’s sponsorship of the equestrian-athlete daughter of a longtime friend of President Park Geun-hye has helped to land South Korea’s top company in the center of the country’s influence-peddling scandal.
Samsung agreed last year to pay $18 million to Core Sports International GmbH, a consulting firm controlled by Park’s friend Choi Soon-sil, who is in jail and faces charges of abuse of power and fraud in a criminal trial that began this month.
A South Korean court has also issued an arrest warrant for Choi’s Germany-based horse-riding daughter, 20-year-old Chung Yoo-ra — who has been the main beneficiary of the sponsorship — for alleged criminal interference related to her academic record, and other unspecified charges.
The sponsorship deal is being examined by prosecutors as they try to ascertain whether Samsung, which was also funding and chairing the Korea Equestrian Federation (KEF), sought favors from Choi and President Park in return for funding initiatives backed by them. In particular, they are looking at whether favors included the National Pension Service’ support for Samsung’s founding family in a shareholder vote last year.
“A crucial part of our investigation is to look into why Samsung and the KEF supported Choi Soon-sil and her daughter Chung Yoo-ra and transferred funds to companies set up by Choi or involved with Choi,” an official at the special prosecutor’s team told Reuters by phone. He declined to be identified because he is not authorized to speak with the media.
Park has been impeached by parliament over her role in a wide-ranging influence-peddling scandal linked to Choi, and now awaits a Constitutional Court review of that decision, which if upheld would make her the first democratically-elected South Korean leader to leave office in disgrace.
Park
Sponsorship
Reuters has reviewed a copy of Samsung Electronics’ August 2015 contract with Core Sports to sponsor the team at a German facility in Biblis, a small town south of Frankfurt. Neither party announced the sponsorship.
“Samsung wishes to develop an Equestrian Team, including overseas training of athletes to prepare for 2018 Asian Games and World Equestrian Games,” the consulting agreement says.
Samsung Electronics ended up spending about 8 billion won ($6.6 million) on the team, which went to support Chung, according to testimony by Samsung Group’s de facto head, Jay Y. Lee, during parliamentary testimony earlier this month.
A more precise accounting, including whether some of that funding supported her coach and fellow rider, Park Jae-hong, was not available.
The team was meant to include six riders with 12 horses, Samsung’s contract says, but never grew beyond Chung and her coach, according to lawmakers on a parliamentary committee investigating the presidential scandal.
Reuters was unable to determine why the team did not expand beyond the two riders.
Samsung’s outlay included the 1 million euros ($962,000) purchase of a horse to be used by Chung named Vitana V, according to Lee.
He told the hearing there was a reason the group felt compelled to fund the equestrian team, but did not say what that was.
“I was told there were inevitable circumstances ... But I admit that the deal was done in an inappropriate way and regret that I didn’t look into it more thoroughly,” Lee testified. He didn’t elaborate further.
Chung was not available for comment and her lawyer, who also represents her mother, did not return multiple requests for comment. Choi, who has denied legal wrongdoing, told lawmakers on Dec. 26 that she had not sought the sponsorship from Samsung. Reuters could not reach Park Jae-hong for comment.
Samsung Electronics declined to comment for this story.
Sung-Kwan Park, a Frankfurt-based lawyer who was Core’s managing director, declined to discuss details of the deal when approached by Reuters, citing attorneyclient privilege.
Samsung Electronics’ support for Choi-backed initiatives also included 1.6 billion won to a foundation run by Choi’s niece Jang Si-ho, and another 20.4 billion won, funding shared with the company’s affiliates, to two foundations set up by a major business lobby to support Park policies. Prosecutors say in their indictment of Choi that they suspect that she controlled the foundations, including choosing staff.
Also: SEOUL, South Korea:
South Korea’s Constitutional Court on Friday said it cannot require President Park Geun-hye to testify in her impeachment trial that enters the argument phase next week, dismissing demands by lawmakers who voted to remove her over a corruption scandal.
The nine-justice court also confirmed the dates when some witnesses will testify but delayed a decision on whether to make companies answer whether they were really forced into sponsoring foundations controlled by the president’s jailed friend, Choi Soon-sil. Lawmakers, who are the prosecutors in an impeachment trial, argued it could pressure companies.
Park’s lawyers, however, said the court needed to verify facts independent of the findings by state prosecutors, who accused Park of allowing Choi to interfere with government affairs and of colluding with Choi to extort money and favors from the country’s largest companies. The court said there was no way to force Park to appear and the trial can proceed without her.
South Korea’s opposition-controlled parliament voted to impeach Park on Dec 9 over the corruption scandal, and the court has up to six months to decide whether she should permanently step down or be reinstated.
During the impeachment trial, the court will also review lawmakers’ accusations that Park was responsible for media restrictions and government inaction during a 2014 ferry sinking that killed more than 300 people, mostly teenagers on a school trip.
State prosecutors have passed the investigation to a special prosecution team, which on Friday summoned an arrested former presidential aide for the second time this week as they focus on bribery suspicions between Park and the Samsung Group.
Ahn Jong-beom, Park’s former senior secretary for policy coordination, allegedly directed former Health Minister Moon Hyung-pyo to pressure the National Pension Service to support a merger between two Samsung affiliates last year.