November 11, 2016 13:28
Prosecutors are looking into mounting evidence that President Park Geun-hye met last year with the heads of conglomerates to solicit donations for her friend Choi Soon-sil's dubious nonprofit foundations and promised them favors in return.
Sources said on Thursday that executives from Samsung, Hyundai Motor, SK and four other top conglomerates prepared their own "wish lists" for the meeting with Park in July last year.
They allegedly wrote down how they intended to contribute to Cheong Wa Dae's economic and cultural pet projects and what type of assistance they wanted in return.
The wish lists were then allegedly passed to-and-fro between the office of the chief presidential secretary for economic affairs and conglomerate staff.
Some conglomerates apparently wrote euphemistically worded requests for cooperation involving either the tax-free transfer of management control from the owners to their children or for pardons of owners who were serving prison terms.
One source said, "Rather than directly demanding support for the transfer or for pardons, the chaebol groups said that their management situations needed to be 'stabilized' if they were to invest in the projects Cheong Wa Dae was proposing."
Each conglomerate faced its own set of headaches at the time. Samsung was struggling with the merger of Samsung C&T and Cheil Industries to facilitate the handover of leadership from chairman Lee Kun-hee to his son Jae-yong. The group's Byzantine cross-ownership structure means such maneuvers allow the owner family to retain control despite owning only a small amount of shares in its various listed subsidiaries.
Samsung donated a whopping W20.4 billion to Choi's dubious Mir and K-Sports foundations (US$1=W1,150). SK Group chairman Chey Tae-won had been jailed for embezzlement, and the head of CJ Group was also behind bars.
One executive said, "The reality we face is that it's difficult to turn down a request from Cheong Wa Dae. Businesses will naturally wish to have their problems solved as they accept the demands made by the administration."
The conglomerates, to avoid criminal charges, are mostly claiming that they were leaned on by Cheong Wa Dae rather than offering bribes. There are rumors that the conglomerates have already shredded the evidence as prosecutors dragged their heels in terror of having to probe the president.
One source at a top 5 conglomerate said, "Around two months ago, we were told by the Federation of Korean Industries that it would be advisable to destroy all documents related to the Mir foundation, and we deleted all e-mails and other documents exchanged with the office of the chief presidential secretary for economic affairs."
But prosecutors say the conglomerates cannot get rid of every trace since investigators have raided FKI headquarters already. One attorney said, "If conglomerates are found to have asked for favors from Cheong Wa Dae in the process of donating money, they could face charges of bribery. Prosecutors could offer them immunity from prosecution if they want to elicit more honest testimony."
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