• IN SKOREA

    Samsung offices raided over influence-peddling scandal

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    SEOUL: South Korean prosecutors on Wednesday raided offices of the Samsung Group as the electronics giant is dragged further into a snowballing influence-peddling scandal that has engulfed President Park Geun-Hye.

    The raid comes as Samsung faces allegations it bribed Park’s confidant Choi Soon-Sil to win state approval for a controversial merger it sought last year.

    Prosecutors visited the group’s Future Strategy Office, which oversees key business decisions, the Yonhap news agency reported.

    A Samsung spokesman confirmed the visit by prosecutors but declined to elaborate.

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

    It was criticised by many who said it wilfully undervalued Samsung C&T’s stocks, but Seoul’s National Pension Service (NPS)—a major Samsung shareholder—voted in favour of the deal, which eventually went through.

    US hedge fund Elliott Management, which controls about 0.62 percent of Samsung, rallied opposition to the deal, and although it lost the battle its campaign was seen as a watershed moment for shareholder activism in South Korea.

    Prosecutors also raided several NPS offices on Wednesday, a NPS spokeswoman said. The pension service is overseen by the welfare ministry and the minister in charge at the time was seen as very close to Park.
    Choi has been formally indicted on charges of abuse of power and coercion.

    She is accused of leveraging her personal relationship with Park to coerce donations from large companies like Samsung to two non-profit foundations she set up and allegedly used for 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.

    The scandal has seen Park’s approval ratings plunge to record lows, and hundreds of thousands of protestors have taken to the streets in a series of weekly protests to demand that she resign.

    Samsung—South Korea’s biggest business group—donated 20 billion won ($17 million) 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.

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