Samsung chief questioned for 11 hours

April 5, 2008 5:59:40 PM PDT
Special prosecutors probing claims of corruption at Samsung Group took their investigation to the very top, quizzing its chairman in a lengthy interrogation over allegations the conglomerate paid bribes and engaged in other illegalities. Lee Kun-hee, who has run South Korea's biggest industrial group for two decades, emerged early Saturday after nearly 11 hours spent in the office of the independent counsel examining the claims raised last year by a former Samsung lawyer.

Surrounded by a throng of waiting reporters, the 66-year-old tycoon appeared to backtrack from the strong denials he made Friday afternoon upon arrival for questioning, when he said he had nothing to do with either directing the setting up of a slush fund or ordering the payment of bribes.

"This is all due to my carelessness," Lee said. "I am responsible for everything and must take responsibility."

It was not clear, however, if the remarks amounted to any admission of wrongdoing. Asked by a reporter if he admitted responsibility for the principal allegations, Lee said "not 100 percent."

The scene quickly turned chaotic as shouting reporters closed in on Lee, seemingly trying to block his way as he tried to move toward the exit of the building and then following him to his waiting car amid aggressive jostling.

The highly anticipated questioning, which came three months after the start of the probe in January, was widely seen as its climax, though Cho Joon-woong, the investigation's chief, has until April 23 to collect evidence.

Investigators questioned Lee's wife, who heads a Samsung art museum, for more than six hours Wednesday. His son, an executive at Samsung Electronics Co., brother-in-law and senior Samsung Group officials have also endured hours of questioning.

South Korea has been absorbed by the scandal since Kim Yong-chul, the conglomerate's former top lawyer, claimed in November that Samsung had 200 billion won ($200 million) in a slush fund and used it to regularly bribe prosecutors and judges.

Kim also alleged that Lee's wife used some of the money to buy expensive works of art from abroad, including "Happy Tears," by the late pop artist Roy Lichtenstein.

Samsung vociferously denied Kim's allegations when they were raised.

The uproar over the claims was such that lawmakers, suspicious as to whether state prosecutors could be neutral in a case in which they were accused of taking Samsung money, established the independent counsel, which was reluctantly approved by former President Roh Moo-hyun.

Samsung Group - with dozens of businesses including shipbuilding, construction, insurance and leisure - stands atop South Korea's corporate world and is widely respected by the country's citizens as the global face of their economy.

Lee, whose late father established the conglomerate 70 years ago, is credited with turning its flagship Samsung Electronics into a top global brand by transforming the corporate culture into one focused on quality.

Samsung, however, has also been a magnet for criticism, with many South Koreans, despite feeling pride in its achievements, worrying that the family-run conglomerate - and its chairman - have too much power and influence in society.

Besides the slush fund, bribery and art claims, investigators are looking into long-simmering allegations of murky dealings involving the group's ownership. Samsung consists of dozens of corporations, some unlisted, and has a complex structure involving cross-shareholdings by group companies.

South Korean conglomerates, known as "chaebol," have long been accused of influence-peddling as well as dubious transactions between subsidiaries to help controlling families evade taxes and transfer wealth to heirs.

Analysts generally believe that Lee himself will avoid prosecution, though say group officials could be indicted if the investigation uncovers wrongdoing.


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