Samsung heir denies all charges
SEOUL: The heir to the Samsung business empire denies all charges in connection with a wide-ranging corruption scandal, his lawyers told a preliminary hearing yesterday.
Lee Jae-yong, 48, was not present at Seoul Central District court for the hearing, which comes as his giant company — the world’s biggest smartphone maker — struggles to recover from a recall scandal.
Mr Lee, the vice-chairman of Samsung Electronics, is being held in custody on accusations of bribery, corruption, perjury and other offences stemming from a scandal that has seen President Park Geun-hye impeached. Four other Samsung executives have also been charged.
“Everyone denies all the charges,” a defence lawyer told the court at the hearing, which lasted little more than an hour.
The prosecutors’ formal indictment was sketchy, with some of the accusations lacking clear evidence and only circumstantial, the defence said.
The accused allegedly paid nearly US$40 million in bribes to Ms Park’s close friend Choi Soon-sil to secure policy favours.
The courtroom was about 80% full, with dozens of reporters, students and a handful of middle-aged and elderly citizens.
When one of Mr Lee’s attorneys finished reading his statement, an elderly lady abruptly stood up from her seat and shouted: “Can a member of the public ask a question?”
Her request was rejected by the judge and she was removed by security when she persisted.
Mr Lee has effectively been at the helm of Samsung since his father suffered a heart attack in 2014.
One of the favours which Mr Lee allegedly sought from Ms Park was state approval for a controversial merger in 2015 of two Samsung units seen as a key step to ensure a smooth transfer of power to him.
The deal was opposed by many shareholders who said it had wilfully undervalued shares of one of the two firms. But it eventually went through after the national pension fund — a major Samsung shareholder — approved it.
The corruption scandal centres on Ms Choi, who is accused of using her close ties with the president to force local firms to “donate” nearly $70 million to nonprofit foundations, which Ms Choi allegedly used for personal gain.
Samsung, South Korea’s largest business group with revenues equivalent to about a fifth of the country’s GDP, was the single biggest donor to the foundations.
It is also accused of separately giving millions of euros to Ms Choi to bankroll her daughter’s equestrian training in Germany.
Mr Lee’s arrest, the first for a Samsung chief, sent shockwaves through the company and triggered the announcement of a major reform of its top-down management style.
The scandal has cast a renewed light on the cosy ties traditionally enjoyed by the government and the family-controlled conglomerates known as chaebols that dominate the country’s economy.
The groups have increasingly become objects of public scorn as criticisms mount over their management practices, including rapid promotions for family members — some of whose antics have battered the firms’ images.
An heir to Hanwha Group — South Korea’s eighth-largest conglomerate — was convicted and given a suspended jail sentence on Wednesday on charges including assault after a brawl at a bar.
Hundreds of thousands of South Koreans taking part in weekly street rallies demanding Ms Park’s removal have also called for the arrest of the tycoons involved in the scandal, including the leaders of Hyundai, SK and Lotte.
Yesterday’s hearing came a day before the Constitutional Court rules on whether to uphold Ms Park’s impeachment by parliament.
If it does, Ms Park would become the first-ever South Korean president to be sacked by impeachment and a presidential election would be held within 60 days.