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[garykasparov]

http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2007/11/27/200711270045.asp

Prosecutors ban Samsung officials from leaving nation

State prosecutors yesterday banned several people including some Samsung Group officials from leaving the country, pending an investigation into a slush fund and bribery scandal involving the business conglomerate.

The investigation was launched after civic groups filed a complaint earlier this month requesting a probe into allegations by a former Samsung attorney that it amassed hundreds of billions of won in secret funds and gave money to government officials and politicians.

Samsung Group vice chairman Lee Hak-soo was among the people placed under the overseas travel ban, sources said. Prosecutors also said they will question the former Samsung lawyer who initially raised the allegations, Kim Yong-chul, this week.

In a news conference yesterday, Kim raised new allegations that Samsung's five subsidiaries, including Samsung Heavy Industries Co. and Samsung Corp., misrepresented a total of 7.2 trillion won in financial statements.

He also claimed that Samsung Corp. played a key role in creating slush funds through contracts with overseas branches.

He made public written agreements on equipment purchases between Samsung Corp. branches and Samsung SDI, a display maker, in 1994. He claimed that about 200 billion won in slush funds was raised through the contracts.

"It is easier for Samsung Corp. than it is for other subsidiaries to create slush funds because the trading arm does all the purchasing and construction projects within the group," Kim told reporters at a Catholic church in Seoul.

Samsung denied Kim's allegations, saying they were "untrue, distorted and exaggerated." The group said in a press release that it will take legal action after examining the details.

Kim also claimed that the law firm Kim & Chang and the accounting firm Samil PricewaterhouseCoopers received hefty fees for helping Samsung forge evidence and accounts.

Kim & Chang defended Samsung in a slew of lawsuits, including one involving Everland Co.'s sale of convertible bonds at sub-market prices to chairman Lee Kun-hee's son in an alleged scheme to transfer managerial control of the group.

Kim also publicized documents indicating that the chairman's wife, Hong Ra-hee, and her in-laws used money from the slush funds to buy expensive artwork, including the $8 million "Bethlehem's Hospital" by Frank Stella. The painting was worth over 20 million won at 2002 exchange rates.

"More than 60 billion won flowed out of the country between 2002 and 2003 as Hong; Shinsegae Group chairwoman Lee Myung-hee; Park Hyun-joo, the mother-in-law of Lee Jae-yong; and Shin Yeon-kyun, wife of Joongang Daily chairman Hong Seok-hyun (Hong Ra-hee's brother); bought the pricy artwork," Kim said.

"I heard from the chairman's son that a $7.16 million painting by Roy Lichtenstein is on display at chairman Lee Kun-hee's house," he said, referring to one of the artworks allegedly purchased with slush fund cash.

The whistleblower disclosed a list of prices paid for each piece of art and recipients of the payments.

Samsung denied the allegations, saying that the group never bought the two paintings.

Kim added that most of chairman Lee and his family's assets are kept in bank accounts held by Samsung's top executives.

Kim also said the major newspaper company Joongang Daily's spin-off from Samsung Group was not properly conducted.

"Joongang publisher Hong Seok-hyun was trusted with controlling stake in the company, held by Samsung chairman Lee," Kim said. "Hong holds the title as major shareholder, but he doesn't have voting rights; Lee does."

The Joongang Daily refuted Kim's claims, saying the company was separated from Samsung when Lee donated his entire stake to a public foundation.

"The entire process was supervised and approved by the Fair Trade Commission," the newspaper company said in a press release. "We consider Kim's fictitious allegations as libel and will thus take legal action."


By Kim So-hyun


([email protected])

[Scotticus]

Why bother? They're just going to let them off with a slap on the wrist, if that.

[thepeel]

Well, maybe some old dude will get charged, convicted and jailed. He will then appear in a wheelchair two or three days later, with a blanket warmly covering his legs, suffering from exhaustion etc etc. He'll then be admitted to a hospital for "treatments" where he will be free to come and go. He sentence will be waved for respect of the ill elderly.