Following LG, Samsung Is Now Target of Prosecution

On November 24, the prosecution launched an all-out investigation against the alleged illegal fundraising for the previous general election, seizing and searching the property of Samsung Electro-mechanics Company, which is the Samsung Group’s first-rated affiliate. The actions brought on by the prosecution shows how serious the prosecution is and taking this matter on discovering the corporate money sources for the illegal money, which could enormously affect other related business entities.

Why targets Samsung Electro-mechanics Co.?

The prosecution’s intense search against the main headquarters of Samsung Electro-mechanics and its contract company, Dong Yang Electronics Inc., could be interpreted as an attempt to break through the current hardships in the investigation for the allegation and also to treat all relevant business entities in a fair manner.

The prosecution launched the same type of investigation, seizing and searching LG Homeshopping until last week. Some of the big corporations had sent in their chaebol figures to the prosecution. However, the prosecution had to be tougher since they could not secure any specified evidence that the five big businesses, including Samsung, LG, Hyundai Motors, and Lotte, were secretly delivering colossal amounts of illegal funds during last year’s general election.

According to the investigation team, restructuring chiefs and financial team chiefs of these companies have tried to attribute the related facts to the group’s chairmen saying, “Only a chairman himself would know the exact amount of money flown into politicians,” whereas the alleged group’s chairmen have been repeatedly saying, “I once delivered some of the money for our convenience, but there has been no official ‘illegal money.’”

Meanwhile, some of the searched companies complained about an unfair investigation process from which only the number one group, Samsung, was excluded while the other groups were negatively affected. Under these circumstances, the prosecution had to search against Samsung Electro-mechanics in order to secure material evidence for the allegation that the company’s secret money was given to Samsung Restructuring Headquarters and then to each party, according to the analyst sources.

A prosecution official said, “We have no tangible evidence yet, but the search is broadly related to the ‘illegal money,’” proving that its search against Samsung had to be done.

How this will affect the entire investigation process

Given the extent to which the prosecution has influenced its will to delve into the allegation, its pressure against other business entities is likely to heighten.

An official from the prosecution said, “Considering its position in the business world and the past malpractice of delivering ‘illegal money’ to the political community, Samsung has to be the center of this investigation.” Others argue however, that the search against Samsung Electro-mechanics is just intended to showcase the apparent fairness of the investigation process for other businesses.

One thing for sure, the prosecution is bound to launch a comprehensive seizure and search investigation against any corporate entities if anything remotely relating to the secret money comes up on the surface down the road, while not hesitating to summon up any group’s chairman.

Wi-Yong Jung viyonz@donga.com