Samsung’s money tied to scandal

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Samsung’s money tied to scandal

Samsung Electronics is suspected of lavishly sponsoring the 20-year-old daughter of Choi Soon-sil, the friend of President Park Geun-hye detained for exerting behind-the-scenes influence in the government.

A special investigation team under the Seoul Central District Prosecutors’ Office said Wednesday they found that Samsung Electronics had transferred some 2.8 million euros ($3.10 million) to Core Sports, a company in Germany established by Choi and daughter Chung Yoo-ra, who was a gold medalist in dressage in the 2014 Incheon Asian Games. Part of the money - estimated at over 1 billion won - was allegedly used to buy a horse for Chung, who has already been accused of having enjoyed special privileges at Ewha Womans University. An investigation of related employees at Samsung is imminent.

Rumors circulated in September - before the Choi scandal snowballed - that the tech giant was behind her daughter’s activities as an equestrian athlete, buying a horse and an entire horse-riding course for her.

On Wednesday, Samsung said through a spokesman that the company “would fully cooperate with prosecutors and the investigation will make everything clear.”

Involvement in the Choi scandal, which threatens the presidency of Park and shows no sign of subsiding, is not good for Samsung after the public relations and financial disaster of its exploding Galaxy Note7 phablet.

According to prosecutors and chaebol insiders, Samsung inked a 10-month consulting deal around October 2015 with Core Sports, a sport consulting firm whose name was changed to Widec last November. Under the contract, Samsung paid the 2.8 million euros to Core to be used for buying and managing a horse, renting a special vehicle for horses and arranging participation in horse-riding championships. The money was transferred from a Korean bank to Core’s bank account in Germany.

Samsung staunchly denied rumors initially but later told some media outlets that the contract was part of its corporate activities to help dressage athletes as a sponsor of the Korea Equestrian Federation. It said the federation recommended Core to Samsung.

The federation said it had no knowledge of the deal.

The horse Samsung bought is Vitana V. Spanish equestrian website Top Iberian reported on Feb. 10 that Vitana V was “traveling to Korea” after it had been “purchased by Samsung for the Olympics Games in Tokyo.” The article added that a Samsung training academy would be based in a German town.

Chung’s biography on the Federation Equestre Internationale web site lists Vitana V as one of five horses she owns.

Chung said in an interview in Germany earlier that she plans to compete in the 2020 Tokyo Olympics.

A Samsung spokesman said Wednesday it is true the company purchased the horse. But it was sold later, he said, refusing to elaborate.

Samsung has a history of using equestrian sponsorships for marketing.

In October 1986, current Chairman Lee Kun-hee launched Korea’ first horseback-riding team, the Samsung Equestrian Team, two years ahead of the 1988 Seoul Olympics.

It initially consisted of two riders and six horses.

The team participated in four Olympics, including the one in Seoul and in 2008 in Beijing. It was disbanded in 2010.

Samsung’s Vice Chairman and heir apparent Lee Jae-yong, 48, won a silver medal in the second Asian equestrian championship that took place in Gwacheon, Gyeonggi, in 1989.

Meanwhile, Lee joined the first board of directors’ meeting at Samsung Electronics since his official appointment to the board last Thursday. He did not make any public statement.

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