Hong barred from travel, Chung on wanted list

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Hong barred from travel, Chung on wanted list

The independent counsel team issued Thursday an overseas travel ban on Hong Wan-sun, a former senior official of the state-run pension fund, as a part of its investigation into bribery allegations involving President Park Geun-hye, Choi Soon-sil and Samsung.

Independent counsel Park Young-soo and his team formally launched the investigation on Wednesday and raided 10 locations, including the National Pension Service and the Ministry of Health and Welfare offices, to investigate whether Park and Choi influenced the pension fund’s support for a controversial merger of Samsung Group’s two units last year.

Hong, former head of the National Pension Service Investment Management Office, was barred from leaving the country. In July of last year, Hong cast the decisive vote to support the $8 billion merger between Samsung C&T and Cheil Industries, despite experts’ strong disapproval.

The deal allowed Samsung to initiate a generational leadership shift by solidifying heir apparent Lee Jae-yong’s grip on Samsung Electronics.

Samsung Electronics was a generous supporter of Choi’s daughter, Chung Yoo-ra, and her equestrian activities. It promised 22 billion won ($18.4 million) for her training.

It also signed a contract with a company created by Choi in Germany and paid it about 8 billion won. Samsung also contributed 20.4 billion won to two nonprofit foundations that Choi practically controlled.

Choi was indicted last month on charges of coercing conglomerates to make massive donations to the foundations in collusion with Park. The generous sponsorship and donations are suspected to be bribes paid in return for Park’s influence over the pension service to approve the deal. Determining whether the money Samsung gave Choi was a bribe is the top priority of the independent counsel.

The independent counsel said Hong played a crucial role in the National Pension Service’s dubious decision to support the merger. The service did not review the issue with its outside expert panel and decided to support the deal at an investment review conference hosted by Hong.

The independent counsel said Hong could be charged with breach of trust over the decision.

At the National Assembly hearing on Dec. 6, Hong testified that he had met with top Samsung executives before the merger. He said he met with Samsung C&T President Kim Shin on May 26, 2015, when Samsung announced the merger.

He also said he had a secret meeting with Samsung Electronics Vice Chairman Lee on July 7, 2015, three days before he hosted the investment review conference for the pension service.

Shareholders of Samsung C&T approved its takeover by Cheil Industries on July 17, 2015.

But Hong denied that the Blue House pressured him to support the deal and Samsung compensated him for its approval.

The independent counsel team summoned officials of the pension service and welfare ministry and questioned them about the merger.

The Chosun Ilbo also reported Thursday that Park instructed An Chong-bum, then presidential senior secretary for policy coordination, to make sure the merger went smoothly. Park reportedly made the order at the end of June last year and An wrote it in his work diary, the newspaper said.

At a daily press briefing on Thursday, assistant independent counsel Lee Kyu-chul refused to confirm the report, saying the probe is ongoing and he does not want to discuss the details. When asked if the investigators are reviewing An’s work diaries, Lee said, “in principle, I think all the speculation in media reports will eventually be included in our investigation.”

During the initial investigation by the prosecution, prosecutors raided An’s home and office and confiscated 17 volumes of work diaries, containing 510 pages. An kept meticulous records of his work, including Park’s orders, in the pocketbooks from January last year until October of this year.

The independent counsel also said Choi’s daughter, Chung, has been placed on the wanted list. It obtained the arrest warrant earlier this week to take custody of Chung, currently staying abroad, possibly in Germany. “Anyone who offers Chung shelter in Korea or foreign countries, or attempts to destroy evidence for her, will face criminal charges,” Lee said.

BY SER MYO-JA [ser.myoja@joongang.co.kr]
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