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Investigators Raid Samsung Chairman`s Office

Posted January. 16, 2008 22:17,   


The special investigation team led by Prosecutor Cho Joon-woong raided Monday Samsung Chairman Lee Kun-hee’s office, also known as Seungjiwon, the residence of Vice Chairman Lee Hak-su, who heads the Group’s strategy and planning department, and homes of six other key executives. The simultaneous raids were made four days after the probe into the group’s alleged bribery and slush fund scandal started.

The successful completion of the special investigation will be largely dependent on the results of the raids combined with the result of the tracking of bank accounts under employees` names, which had been carried out throughout last year.

○ The first ever raid of Chairman’s office

The independent counsel raided Seungjiwon located in Itaewon-dong, Yongsan-gu, Seoul, first rather than the chairman’s home or his office at Samsung headquarters.

It is the first time that Seungjiwon was raided by prosecutors who couldn’t make the same attempt in 2003 and 2004 when the nation’s largest conglomerate was being investigated over the presidential election funds.

The prosecution seems to be taking into consideration the fact that Samsung’s former lawyer Kim Yong-chul emphasized the importance of Seungjiwon at the press conference. Kim said Chairman Lee received key figures of the company and made major decisions about management there. The raid shows the independent counsel’s firm determination to get to the bottom of the matter by obtaining strong evidence that points to Lee’s involvement.

Based on the obtained bank account records, the counsel is expected to focus its investigation on revealing the connection between the chairman and the money in bank accounts suspected of having been established by the group using employees` names.

“The counsel should identify whether the money in the borrowed bank accounts is company funds or private funds of the chairman,” a lawyer who worked with special investigation teams said.

○ Raids include private residences of employees in charge of Group’s funds

What is noticeable is that the special inquiry team also raided the private residences of Samsung’s key officials and employees in charge of the Group’s finance. Prosecutors seemed to aim at places highly suspected of having hidden documents related to the alleged slush fund.

The prosecution seems to believe that the group could have destroyed evidence in one way or another since Kim Yong-chul blew the whistle on Samsung’s slush fund last October.

What also draws attention is that along with the homes of Vice Chairman Lee Hak-soo, President Kim In-joo, and Vice President Choi Kwang-hae, the special investigation team raided the homes of three other employees, surnamed Choi and Kim, who are in charge of the finance of Group’s strategy and planning department, and Director Jeon Yong-bae as well.

Jeon is reported to have managed the bank accounts under the name of Kim Yong-chul when the lawyer was working for Samsung’s structure coordination division. Jeon took over the task from the now deceased director Park Jae-jung who had controlled the group’s fund. Choi and Kim are now responsible for the management of the group’s fund.

The counsel targeted executives and employees in charge of the Group’s finance to secure any clues that will link to allegations of illegal accumulation of slush fund and bribery.

○ Is the raid customary one?

The raid on Chairman Lee’s private office and main executives’ residences was a symbolic move that shows the independent probe team’s firm stance.

In a remarkable achievement, the prosecution unearthed some 150 bank accounts under the names of employees on November 30, last year, by selectively raiding Samsung Securities Co. among other subsidiaries.

Since then, the timing and places on which the special counsel plans to make additional raids have been considered an indication that shows the direction of the probe.

Experts, however, say it’s too early to predict the results of the raid.

“It’s too early to talk about the results from the raid. We will look into closely what we’ve found,” said assistant prosecutor Yun Jeong-seok right after the raid. However, a senior prosecutor was pessimistic about the raid, saying, “The counsel wasn’t likely to search the residences based on clues. Rather, it seemed a customary one.” During the analysis of what prosecutors obtained from the raid, it will become certain whether the special inquiry team secured additional evidence.

needjung@donga.com dnsp@donga.com