Samsung accused of bribery in S.Korea

Photo: Samsung accused of bribery in S.Korea

A criminal lawsuit was filed against S. Korea’s top Samsung Group executives by two civic organizations after a former employee accused the conglomerate of bribery and other wrongdoing.

Lawyers for a Democratic Society and People's Solidarity for Participatory Democracy accused Samsung Chairman Lee Kun-hee and two other high-ranking Samsung officials of creating slush funds through affiliates to bribe prosecutors, judges, government officials and lawmakers.

"We are requesting thorough investigation and punishment," the civic groups said in the suit, posted on their respective Web sites.

Prosecutors will examine the allegations to determine whether to launch an investigation, said an official at the Supreme Prosecutors' Office. He spoke on condition of anonymity as he was not authorized to speak to media.

Samsung criticized the allegations, but said it would cooperate if an investigation is started.

"Samsung regrets that these false claims have been made about our company, but we will cooperate fully with the prosecution should there be any investigation into these allegations," the company said in an e-mailed statement.

The conglomerate, with interests in construction, shipbuilding, insurance and other areas, includes Samsung Electronics Co., South Korea's largest corporation.

The suit comes one day after Kim Yong-chul, a former head of the legal affairs team at Samsung's now-defunct corporate restructuring office, made similar accusations against Lee and other top officials. Kim worked for Samsung between 1997 and 2004.

On Monday, Samsung issued a 25-page denial of Kim's claims about two hours before he aired them at a press conference held at a Catholic church in Seoul.

Samsung said in that statement it would "sternly deal with" any attempt to harm the business group.

Kim, a former prosecutor, also claimed Samsung manipulated evidence and witnesses in a court case over alleged shady deals critics say were aimed at transferring corporate control from Lee to his son, Lee Jae-yong.

Earlier this year, the Seoul High Court upheld a lower court ruling that found two Samsung executives guilty of selling bonds convertible to shares to Lee's children at prices less-than-market value.

They were sentenced to three years in prison, suspended for five years, and a fine of 3 billion won (US$3.3 million; EUR2.3 million) each. Both have appealed the ruling to the Supreme Court.

For decades, South Korean conglomerates, known as chaebol, have been accused of dubious dealings between subsidiaries to help controlling families evade taxes and transfer wealth to heirs.

Samsung has been plagued by allegations of questionable accounting and business practices among its subsidiaries.

The civic groups, in their suit, accused Samsung of bribing officials to maintain good relations to avoid "possible disadvantages in the future."

They also accused Samsung of operating slush funds in bank accounts under the names of top company officials.

One bank official and one securities firm official - both unidentified - were also included in the criminal lawsuit.

Kim, the former Samsung official, said he himself participated in the alleged wrongdoing.

"Samsung treated me well but they ordered me to commit crimes," Kim told reporters Monday "The illicit lobbying - buying off people with money - was the basic task of all executives and I was responsible for those in the legal field."