Samsung Rocked By Bribery Scandal

By Ikenga Chronicles November 23, 2016

Samsung Rocked By Bribery Scandal

South Korean giants, Samsung Group are again in the news for the wrong reason as the country’s prosecutors have raided offices belonging to the company and the pension board over the influence-peddling scandal that has engulfed, and might finally pull down President Park Geun-Hye.

Last year, the company won an approval from the government for a merger, a deal the prosecutors are saying was made possible after Park’s confidant, Choi Soon-Sil was bribed to influence decisions. 

When asked about the visit, a spokesman to Samsung answered in the affirmative, though no explanations were tendered. 

The merger in question was that between Samsung C&T and Cheil Industries last year, seen as a key step to ensure a smooth third-generational power transfer to the scion of Samsung’s founding, Lee Jae-Yong.

Many who criticised the deal believed it undervalued Samsung’s C&T stocks, but Seoul’s National Pension Service (NPS), a major shareholder of Samsung endorsed the deal to help it sail through. 

Choi, the link in the scandal is accused of leveraging her personal relationship with Park to coerce donations from big firms like Samsung to two non-profit foundations which was then used for Choi’s personal gain.

Prosecutors say Park colluded with Choi to extract money from the firms and will question the president as a subject in a criminal investigation.

Samsung, South Korea’s biggest business group, donated 20 billion Won to Choi’s foundations, making it the largest single contributor. It is separately accused of offering Choi 2.8 million euros ($3 million) to bankroll her daughter’s equestrian training in Germany, which led prosecutors to raid Samsung Electronics’ offices in Seoul this month.

The group’s advertising unit is also accused of offering a donation to a sports foundation run by Choi’s niece, who is seen as her key aide.

A number of Samsung officials, including Lee, have been questioned by prosecutors over the scandal, which has shed light on unhealthy ties between the government and powerful conglomerates that have endured over decades.