Ex-Samsung vice head to be summoned

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Ex-Samsung vice head to be summoned

A former vice chairman of Samsung Group will be summoned by the prosecution on Thursday on allegations that the country’s largest conglomerate paid legal fees for a company owned by former President Lee Myung-bak’s family.

The Seoul Central District Prosecutors’ Office said Wednesday that it asked Lee Hak-soo to attend questioning at 10 a.m. on Thursday, as a suspect in a bribery investigation.

Not a member of the Samsung-owning family, Lee is the longtime right-hand man of Chairman Lee Kun-hee. He served as the vice chairman of Samsung Group from 2004 to 2008, but stepped down with Lee when they were charged with tax evasion and breach of trust.

The prosecution is currently investigating an allegation surrounding former President Lee and DAS, an auto component manufacturer currently owned by his elder brother, Lee Sang-eun. The former president is suspected to be its real owner.

Lee is suspected of abusing his power as president to pressure his former business partner, Kim Kyung-joon, to return massive investments DAS made into Kim’s failed venture. In 2011, DAS retrieved 14 billion won ($13 million) from BBK, a now-bankrupt investment firm established by Kim. In 2001, BBK was used to commit massive financial fraud, and Kim was later prosecuted and convicted of stock price manipulation and embezzlement of 31.9 billion won.

Some have suggested Lee used the Blue House and Foreign Ministry officials to collect DAS’s investment from BBK before small private investors retrieved their money through a civil suit. The advanced financial crime team headed by senior prosecutor Shin Bong-su recently discovered circumstantial evidence that Samsung Electronics was also involved in the scandal.

DAS filed a civil suit against Kim in a California court in 2003 to collect 14 billion won of its 19 billion won investment in BBK. Making no tangible progress, in 2009, DAS hired Akin Gump, Strauss, Hauer & Feld LLP, a major law firm.

The prosecution said Samsung Electronics paid for the retainer fee instead of DAS. It also questioned whether the payment was linked to the special pardon President Lee granted to Chairman Lee in 2009.

Chairman Lee was convicted of creating slush funds and sentenced to serve a three-year suspended prison term at the time. Former President Lee said he decided to grant a special pardon to the tycoon so that the businessman could restore his membership at the International Olympic Committee and lead a campaign to secure Korea’s bid to host the 2018 Winter Olympics.

The prosecution raided offices of Samsung Electronics in Seoul and Suwon, Gyeonggi, on Thursday and Friday of last week, as well as on Monday. Lee Hak-soo’s home was also raided.

“We want to make clear that this is a bribery investigation,” a prosecution official was quoted as saying by Yonhap News Agency. “It is not bribery when a public servant is not involved.”

This remark indicates that the prosecution suspects former President Lee is linked to Samsung’s suspicious payment of DAS’s legal fee.

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