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Independent probe into Samsung gets Roh's nod
Wed, Nov 28, 2007 The Straits Times
SEOUL - SOUTH Korean President Roh Moo Hyun yesterday approved an independent investigation into allegations of bribery and influence peddling by Samsung Group, the country's largest conglomerate. The move came days after the legislature passed a Bill seeking an independent counsel to delve into the allegations, as well as opposition claims that Mr Roh received Samsung money before and after his 2002 election. 'I decided to accept' the Bill as a majority of the legislature voted for it, Mr Roh said in a televised news conference. Still, he criticised the National Assembly for passing the Bill, saying that it had legal and political problems.

The allegation surfaced earlier this month when Mr Kim Yong Chul, a former top legal affairs official at Samsung, said the company operated slush funds to bribe influential figures such as prosecutors, judges and government officials.

He alleged on Monday that Samsung Group set up a 200 billion won (S$310 million) slush fund to bribe influential figures.

Mr Kim, a former prosecutor himself, said that Samsung used its trading arm Samsung Corp to create the pool of money through intricate contracts with other group affiliates.

He also said family members of Samsung Group chairman Lee Kun Hee used 60 billion won of the money to buy expensive art work.

Samsung has denied the claims and said it is considering legal action against Mr Kim, who worked for the company from 1997 to 2004.

Samsung 'will cooperate in the investigation' by the independent counsel, a company official said on condition of anonymity, citing the sensitivity of the issue.

Prosecutors have banned top Samsung officials, including Mr Lee Kun Hee and vice-chairman Lee Hak Soo, from leaving the country, Yonhap news agency reported, citing unnamed senior prosecution officials.

Prosecutors were also tracing four accounts from a bank and securities firm over allegations that Samsung executives operated slush funds there, Yonhap said.

South Korea's financial regulator also began a separate probe into the bank.

Mr Kim also claims Samsung manipulated evidence and witnesses in a court case over a purported deal that critics say was aimed at transferring corporate control of Samsung from Mr Lee Kun Hee to his son.

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Anti-corruption drive stepped up

The probe into the conglomerate comes as the South Korean authorities stepped up anti-corruption activities, going after some of the country's largest companies, the BBC reported.

Earlier this year, six Samsung executives pleaded guilty in the United States to charges of fixing the price of microchips.

In February, the chairman of Hyundai Motor Company - one of South Korea's biggest firms - was sentenced to three years in jail for embezzlement and breach of trust.

And last year, South Korean prosecutors raided the offices of Citigroup in Seoul as part of a probe into the sale of a local bank to a US investment fund.