In South Korea Industry titans harangued in scandal probe

Protesters outside the national assembly greeted the arriving industry titans with cries of "Lock them up!"

  • Published:
Samsung Group's heir-apparent Lee Jae-Yong (L) answers a question as Lotte Group Chairman Shin Dong-Bin listens during a parliamentary probe into a scandal engulfing President Park Geun-Hye, at the National Assembly in Seoul, on December 6, 2016 play

Samsung Group's heir-apparent Lee Jae-Yong (L) answers a question as Lotte Group Chairman Shin Dong-Bin listens during a parliamentary probe into a scandal engulfing President Park Geun-Hye, at the National Assembly in Seoul, on December 6, 2016

(Pool/AFP)
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South Korea's most powerful tycoons, including de facto Samsung chief Lee Jae-Yong, stammered and squirmed Tuesday under a verbal assault from a parliamentary committee probing a corruption scandal that has riveted the nation.

Millions watched in astonishment as the televised hearing showed the heads of the country's eight largest conglomerates being publicly harangued over donations their companies made to dubious foundations controlled by Choi Soo-Sil, a close friend of President Park Geun-Hye.

"Do you know anything?" one legislator chided Lee as he repeatedly claimed ignorance of who in Samsung authorised cash transfers to a foundation in Germany that funded the equestrian training of Choi's daughter.

"Do you think you're doing a good job as the head of a global company like Samsung by saying that you don't know?" the legislator demanded.

Graphic on South Korea's eight industry titans who appeared before a parliamentary committee probing an influence-peddling scandal engulfing President Park Geun-Hye play

Graphic on South Korea's eight industry titans who appeared before a parliamentary committee probing an influence-peddling scandal engulfing President Park Geun-Hye

(AFP Graphic)

The vice-chairman of Samsung Electronics and de facto head of the entire Samsung Group looked deeply uncomfortable as he sought to bat away questions with what sounded like rehearsed expressions of remorse and contrition.

"I have so many weaknesses and Samsung has things to correct," Lee responded when asked if he agreed with the public perception that the conglomerates known as chaebols had knowingly connived with Choi.

'We need to change'

"This crisis made me realise that we need to change ourselves," Lee added, ignoring demands to answer the question and prompting one exasperated committee member to shout: "Stop giving ridiculous answers and excuses!"

(Front row, from L) SK Group chairman Chey Tae-Won, Samsung Group's heir-apparent Lee Jae-Yong and Lotte Group Chairman Shin Dong-Bin take an oath during a parliamentary probe in Seoul, on December 6, 2016 play

(Front row, from L) SK Group chairman Chey Tae-Won, Samsung Group's heir-apparent Lee Jae-Yong and Lotte Group Chairman Shin Dong-Bin take an oath during a parliamentary probe in Seoul, on December 6, 2016

(Pool/AFP)

Choi Soon-Sil is currently awaiting trial on charges of coercion and abuse of power. Park on Friday faces an impeachment vote in parliament which is almost certain to be adopted with the backing of more than 30 members of her own Saenuri Party.

Park is accused of colluding in Choi's efforts to strong-arm the companies represented at Tuesday's hearing into funding two foundations that Choi allegedly used as personal ATMs.

Samsung made the biggest contributions of 20 billion won (now $17 million), followed by Hyundai, SK, LG and Lotte whose chairman were also grilled at Tuesday's hearing.

Their giant family-run corporations, or "chaebols", have dominated the export-driven direction of Asia's fourth largest economy for decades.

They all denied providing funds in return for favours but suggested they regularly came under pressure from high-level political circles.

"It's difficult for corporations to turn down a request from the (presidential) Blue House," said Huh Chang-Soo, chair of the GS Group and head of the Federation of Korean Industries.

Lee told the hearing that Samsung received many requests for funding, but "never provided support or gave donations in return for something".

Pressure to donate

Protesters rally against South Korea's President Park Geun-Hye during a demonstration in Seoul, on December 3, 2016 play

Protesters rally against South Korea's President Park Geun-Hye during a demonstration in Seoul, on December 3, 2016

(AFP/File)

He also recalled Park pushing for donations during a meeting in July, but said there was no mention of specific foundations.

He denied any personal relationship with Choi Soon-Sil and, while acknowledging payments had been made that benefited her daughter, stressed that he had not been consulted.

"I will advise my aides to ensure something like this will never happen in the future," Lee said.

It was the first such hearing in nearly 30 years.

In 1988 -- a year after the restoration of presidential democracy -- the chaebol heads were questioned by lawmakers over donations they had made to a slush fund for former military strongman Chun Doo-Hwan.

The current scandal has triggered massive street protests and lifted the lid on simmering anger over widening income gaps and resentment at the gilded life and privileges of the political and business elite.

Protesters carry an effigy of South Korea's President Park Geun-Hye during a rally in Seoul, on December 3, 2016 play

Protesters carry an effigy of South Korea's President Park Geun-Hye during a rally in Seoul, on December 3, 2016

(AFP/File)

Protesters outside the national assembly greeted the arriving industry titans with cries of "Lock them up!"

"It's extremely rare for these people to be exposed to the public eye in this way," Chung Sun-Sup, CEO of Chaebol.com, a website that tracks corporate assets and practices, told AFP.

"People hate them for their behaviour and envy them their wealth. For many, the sight of them being summoned to parliament for a grilling will be quite cathartic," Chung said.

A number of the business leaders have fallen foul of the law before, including Hyundai's Chung Mong-Koo, who was convicted of embezzlement in 2007.

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