Korean industry titans made to sweat in scandal probe | Pakistan Today

Korean industry titans made to sweat in scandal probe

South Koreans sat riveted Tuesday by the televised spectacle of the country’s most powerful business leaders squirming under a barrage of questions from a parliamentary committee probing an ongoing corruption scandal.

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 made to dubious foundations controlled by Choi Soo-Sil, a close friend of President Park Geun-Hye.

Choi 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.

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.

– Who’s who –

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.

Samsung’s Lee looked deeply uncomfortable as he sought to fend off questions about his company’s complicity in the scandal, often resorting to what sounded like a prepared statement of non-specific contrition.

“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 colluded with Choi.

“This crisis made me realise 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.”

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.

– Coercion or bribery –

The chief question the tycoons face is whether their donations were provided in exchange for favour or reward.

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.

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 favour of the merger of two Samsung affiliates that strengthened Lee’s control of Samsung Electronics.

– A rare hearing –

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 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 media.

“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.

Read more: S. Korea elite in hot seat at historic scandal hearings



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