Prosecutors Raid Samsung's Headquarters over Political Scandal

Prosecutors Raid Samsung's Headquarters over Political Scandal

SEOUL, Nov. 8 (Yonhap) -- Prosecutors raided Samsung Electronics Co.'s offices in Seoul and questioned one of its executive officials on Tuesday amid allegations that it provided illicit favors to the daughter of Choi Soon-sil, President Park Geun-hye's close friend at the center of an influence-peddling scandal.

The prosecution said it raided the offices in charge of external affairs, located in the Samsung Group's headquarters in southern Seoul, and confiscated documents related to the tech giant's business with the Korea Equestrian Federation. The federation is suspected of granting undue favors to Choi's daughter Chung Yoo-ra, who was a former member of the national equestrian team.

Prosecutors said they raided a total of nine locations, including the federation and the Korea Racing Authority, as well as homes of officials related to the matter. They declined to specify whose homes they raided.

The office of Park Sang-jin, chief of external affairs at Samsung Electronics and president of the equestrian federation, was also included on the raid list, according to prosecutors.

It was the first time in eight years that the headquarters of the country's largest conglomerate has been raided by prosecutors.

Prosecutors here have been looking into allegations that Samsung sent 2.8 million euros (US$3.1 million) to a company owned by Choi and her daughter in Germany, under the name of a consulting arrangement, to fund Chung's equestrian training.

"We will closely cooperate with the prosecution's investigation," Samsung said. "We think everything will be transparently revealed based on the probe result."

Later on Tuesday, they grilled Hwang Sung-soo, a senior executive at Samsung Electronics, over the allegations raised.

Prosecutors are looking into whether the tech firm asked for favors in return for the money, as well as if Vice Chairman Lee Jae-yong was involved in the decision-making process.

Prosecutors had carried out a round of questioning on another executive director at the group, identified only by his surname Kim, last week.

Investigators earlier said they called in Kim to confirm suspicions that Choi collaborated with a former presidential secretary to push local companies to donate some tens of billions of won to two nonprofit foundations. There have been allegations that the money was then illegally funneled to Choi, who is suspected of meddling in state affairs and amassing profits based on her ties to the president.

Choi is currently being interrogated by the prosecution while under custody, as a local court issued a warrant to formally arrest her last week. Prosecutors are planning to indict her late next week.

Also on Tuesday, an executive at Hyundai Motor Group, surnamed Park, was questioned over similar suspicions. The world's fifth-largest automaker group gave 12.8 billion won ($11.2 million) to the two foundations, which is the second-largest amount among some 80 billion won donated by 53 companies from 19 business groups in the country. The top donation was 20.4 billion won from Samsung, South Korea's largest conglomerate.

"Companies have different circumstances surrounding the donation," a senior prosecutor said, asking not to be named. "We need to look at every single case to check the details."

He said the chiefs of the conglomerates could be called in if the companies fail to provide the necessary facts.

The scandal has also implicated a number of figures in the cultural sector, including Choi's close associate Cha Eun-taek.

Cha, who left for China late September soon after the influence-peddling allegations emerged, returned to South Korea late Tuesday on a flight from the eastern Chinese city of Qingdao.

After arriving at Incheon International Airport, he was detained by prosecutors with a court-issued arrest warrant and taken to the Seoul Central District Prosecutors' Office for questioning. Cha, among other things, is suspected of embezzling funds from an advertisement company he ran and extorting shares in a separate advertising firm formerly affiliated with steelmaker POSCO.

President Park Geun-hye has issued two apologies over the scandal since late last month, but has failed to allay public outrage.

Her approval ratings plunged last week to 5 percent and 11.5 percent, the lowest figures ever compiled by Gallup Korea and Realmeter, respectively, the pollsters said. The previous Realmeter record was held by late president Roh Moo-hyun, whose approval rating once hovered at 12.6 percent.

Tens of thousands of citizens took to the streets over the weekend, demanding her resignation. Another massive rally is scheduled to take place in downtown Seoul on Saturday.

Amid growing calls for a direct investigation into the president, the senior prosecutor said they have not yet decided whether to question Park, and if so, how, adding "(matters) will be more clear after this week."

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