Samsung chairman raided

January 15, 2008 | 11:26

Tags: #chairman #financial #korea #legal

Companies: #samsung

According to a report in the New York Times, the chairman of South Korean technology giant Samsung, Lee Kun Hee, has had his office raided by special prosecutors investigating claims that Lee had been amassing a 'slush fund' which he used to bribe politicians, prosecutors, and other government officials.

As well as the office complex in Seoul, the prosecutors performed simultaneous raids on the houses of the chairman's top two aides who stand accused of helping Lee in his actions, as well as five other executives including vice chairman Lee Hak Soo.

Kang Dong Joo, one of the investigators involved in the raids, is reported as saying that the raids “were necessary to collect evidence.”

The catalyst for the investigation appears to have been the Lee family's insistence on a traditional father-to-son transfer of control of the company. Kim Yong Chul, former legal adviser to the corporation, has accused Lee of bribing officials to ensure that his son, Lee Jae Yong, was granted control of the corporation.

Many of Kim's accusations have been proven by investigators, with the senior state prosecutor involved in the case stating that “a significant amount of secret funds has been found” and that the “basic outline of [Kim's] allegations is confirmed”.

If proven the accusations could pose a problem not only for Samsung but also for South Korea itself, with the corporation controlling a massive one-sixth of the country's entire gross domestic product.

Samsung has yet to comment on the raids.

Is nepotism alive and well in South Korea, or should the company be left alone to produce the gadgets we've grown to love? Let us know your opinion on the case over in the forums.
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