Samsung, pension fund raided as South Korean probe widens

The South Korean authorities raided the Samsung headquarters and to the national pension fund to collect evidence as part of the investigation in which President Park Geun-hye is involved.

The merger of Cheil Industries and Samsung C&T previous year was seen as a crucial step to ensure a smooth third-generational power transfer to Lee Jae-Yong, scion of Samsung’s founding family.

Furthermore, Korean prosecutors said they believe that it is possible President Park Geun-hye conspired in criminal activities carried out by her aids. With a special prosecutor soon to be appointed, the prosecutors are focusing their efforts on an investigation aimed at determining whether there was quid pro quo between Park and Samsung.

Samsung spokeswoman Lim Bomi confirmed that investigators raided the company but declined to comment further.

It is not the first time Samsung has been raided by prosecutors investigating the scandal, and South Korean reports say that the simultaneous raids of Samsung and the pension fund showed that the investigation was expanding to the contentious Samsung merger.

A staff member enters the National Pension Service offices in Seoul’s Gangnam district during a raid by a special prosecutors’ team on November 23.

Investigators are seeking to discover whether Ms Park pressured the fund to support a merger in return for Samsung giving money to confidante Choi Soon-sil, who is accused of using her close relationship with Ms Park to obtain influence and funds.

Vice Chairman Lee and other senior Samsung executives had been summoned by prosecutors for questioning. Some shareholders contested the merger, but it still was approved in July 2015.

“This was expected. Due to the circumstances in this case, prosecutors can not help but be suspicious about the genuine intent behind the donation, such as the timing”, CEO Score’s Park said.

President Park’s lawyer has refused prosecutors requests to question her about the case.

Park was elected to a term in office that ends in February 2018. Naturally, the fund´s approval has been considered as an important move that determined Jong´s stronger position in the company, which benefitted the Samsung´s Group controlling family more than the shareholders.

There were “special circumstances” where NPS-owned stakes in both firms were valued at a similar amount, it said. Before the merger, the NPS held an 11.6 percent stake in Samsung C&T and a 5 percent stake in Cheil Industries.

Moon was welfare minister when the state-run pension operator backed Samsung C&T’s attempt to incorporate Cheil Industries despite strong opposition from advisory groups and some shareholders.