S Korean industry titans grilled in scandal probe | The Daily Star
12:00 AM, December 07, 2016 / LAST MODIFIED: 12:00 AM, December 07, 2016

S Korean industry titans grilled in scandal probe

The publicity-shy heads of South Korea's largest conglomerates faced their worst nightmare on Tuesday, as they were publicly grilled about possible corrupt practices before an audience of millions.

The eight men summoned to appear before a cross-party parliamentary committee probing an influence-peddling scandal engulfing President Park Geun-Hye are among the wealthiest and most influential in the country.

The hearing was carried live by all main Korean broadcasters -- providing a deeply unwelcome spotlight for people unused to being interrogated or held accountable by anyone.

The witness list was a who's who of South Korea's business elite -- including Samsung Electronics vice-chairman and chief-in-waiting Lee Jae-Yong, Hyundai Motors chairman Chung Mong-Koo and Lotte chairman Shin Dong-Bin.

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

All eight faced tough questions about tens of millions of dollars their companies donated to two dubious foundations controlled by Choi Soon-Sil, a close friend of the president.

Choi is now awaiting trial on charges of coercion and abuse of power -- accused of leveraging her ties to Park to strong-arm the chaebols into funding the foundations and then siphoning off cash for her personal use.

Prosecutors have named the president as a suspect in their investigation, citing evidence suggesting she colluded with Choi in coercing the "donations" out of the companies.

"Today's hearing must be an occasion to boldly tell the truth and ease public suspicions about providing financial aid to an individual or a company to solve pending problems," committee chair Kim Sung-Tae said before the eight were sworn in.

The chief question the tycoons face is whether the money was provided on the understanding of some reciprocal favour or reward.

Samsung's Lee Jae-Yong appeared extremely uncomfortable as he sought to deflect questions by the committee over his company's links to Choi's family. "I am aware that we caused great concern to the people and I came here with a heavy heart," Lee said.

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 funnelling millions of euros to Choi to bankroll her daughter's equestrian training in Germany.

As part of the widening probe, prosecutors are also investigating whether Samsung lobbied officials at the state pension fund over a contested merger last year.

The fund, which is the largest shareholder in many Samsung companies, cast a decisive vote in favor of the merger of two Samsung affiliates that strengthened Lee Jae-Yong's control of Samsung Electronics.

The nexus between South Korea's corporate and political cultures has a long and murky history.

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 another foundation -- essentially set up as a slush fund for former military strongman Chun Doo-Hwan.

The current scandal that looks set to cut short Park Geun-Hye's presidency has lifted a 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 corporate chiefs with cries of "lock them up" and some were bundled aside by security as they tried to shove banners in front of the arriving tycoons.

"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 AFP.

"People hate them for their behaviour 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.

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