• SKorean industry titans made to sweat in scandal probe

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    SEOUL: South Korea’s top tycoons, including de-facto Samsung chief Lee Jae-Yong, struggled Tuesday to publicly defend their business practices before a parliamentary committee probing a corruption scandal that has riveted the nation.

    In the first hearing of its kind for nearly 30 years, the publicity-shy heads of the South’s eight largest conglomerates were grilled relentlessly over donations their companies made to dubious foundations controlled by Choi Soo-Sil, a close friend of President Park Geun-Hye.

    With the hearing carried live by main Korean broadcasters, they denied providing funds in return for favors, and suggested they regularly came under pressure from high-level political circles.

    “It’s difficult for corporations to turn down a request from the (presidential) Blue House,” said Huh Chang-Soo, chair of the GS Group and head of the Federation of Korean Industries.

    “Corporations have no choice but to follow the government policies,” added LG Group Chairman Koo Bon-Moo.

    Choi Soon-Sil is currently awaiting trial on charges of coercion and abuse of power, while Park faces an impeachment vote in parliament on Friday which is almost certain to be adopted with the backing of more than 30 members of her own Saenuri Party.

    Park is accused of colluding in Choi’s efforts to strong-arm the companies represented at Tuesday’s hearing into funding two foundations that Choi allegedly used as personal ATMs.

    ‘So many weaknesses’

    Samsung’s Lee looked deeply uncomfortable as he sought to fend off questions about his company’s complicity in the scandal.

    “I have so many weaknesses and Samsung has things to correct,” Lee responded when asked if he agreed with the public perception that the chaebols had knowingly connived with Choi.

    “This crisis made me realize that we need to change ourselves to keep up with public’s expectation,” Lee said, ignoring the lawmaker’s repeated demand to “answer the question.”

    Lee told the hearing that Samsung received many requests for funding, “but we never provided support or gave donations in return for something.”

    He also recalled Park pushing for donations during a meeting in July, but said there was no mention of specific foundations.

    He denied any personal relationship with Choi Soon-Sil and, while acknowledging payments had been made that benefitted her daughter, stressed that he had not been consulted.

    “I will advise my aides to ensure something like this will never happen in the future,” Lee said.

    The witness list was a who’s who of South Korea’s business elite and also included Hyundai Motors chairman Chung Mong-Koo and Lotte chairman Shin Dong-Bin.

    Chaebol country

    Their giant family-run corporations, or “chaebols”, have dominated the export-driven direction of Asia’s fourth largest economy for decades.

    Samsung—the South’s largest business group—made the biggest contributions of 20 billion won ($17 million) to Choi’s foundations, followed by Hyundai, SK, LG and Lotte.

    Samsung is separately accused of funneling millions of euros to Choi to bankroll her daughter’s equestrian training in Germany.

    Prosecutors are also investigating whether Samsung lobbied officials at the state pension fund to help approve a contested merger last year.

    The only precedent for Tuesday’s hearing was in 1988—a year after the restoration of a presidential democracy following decades of military rule.

    In that case, the chaebol heads were questioned by lawmakers over donations they had made to a slush fund for former military strongman Chun Doo-Hwan.

    Growing resentment

    The current scandal has triggered massive street protests and lifted the lid on simmering anger over widening income gaps and resentment at the gilded life and privilege of the country’s political and business elite.

    Protesters outside the national assembly greeted the arriving industry titans with cries of “lock them up.”

    “It’s extremely rare for these people to be exposed to the public eye in this way,” Chung Sun-Sup, CEO of Chaebol.com, a website that tracks corporate assets and practices, told Agence France-Presse.

    “People hate them for their behavior and envy them their wealth. For many, the sight of them being summoned to parliament for a grilling will be quite cathartic,” Chung said.

    A number of the business leaders have fallen foul of the law before, including Hyundai’s Chung Mong-Koo, who was convicted of embezzlement in 2007. AFP

    AFP/CC

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