Liberal lawmakers seek independent council in Samsung investigation

Posted on : 2007-11-15 00:19 KST Modified on : 2007-11-15 00:19 KST
Bill proposed by 151 lawmakers from 3 liberal parties calls for examination of allegations against Samsung

A total of 151 lawmakers from three liberal political parties proposed a bill yesterday aimed at forming an independent council of prosecutors who would investigate allegations that Samsung Group, the nation's largest conglomerate, has maintained slush funds since 1997.

However, the presidential office of Chong Wa Dae, or the Blue House, said that doing so would be akin to an abuse of authority and called on lawmakers to review the proposal, an instruction that does not bode well for a bill that could spark heated political controversy during its deliberation in the National Assembly.

Lawmakers from the United New Democratic Party and two other minor liberal parties said that they would endorse the bill when it comes up for a vote in the Assembly on November 22-23.

Under the proposed bill, a range of Samsung-related allegations will be subject to investigation. Special focus will be placed on three main issues: suspicions of illegal father-to-son funds transfers through Samsung SDS's issuance of convertible bonds at substantially low prices; allegations that Samsung has maintained slush funds as a way to control officials working in the government, the prosecutor's office, the tax service, and other high-level institutions; and the use of borrowed name bank accounts, an illegal practice in which a bank account is opened using a name other than one's own.

The bill stipulates that the Chief Justice of the Supreme Court recommend a number of candidates who could serve as special prosecutors, from which the president would designate one in charge of the overall investigation. The bill also specifies that the investigation should cover the years after 1997, when whistle-blower Kim Young-cheol, the former chief of Samsung's legal team, started working for Samsung.

Kim brought allegations against Samsung two weeks ago, via the civic organization Catholic Priests' Association for Justice, claiming that Samsung was maintaining borrowed name accounts for use as slush funds with which to bribe high-level officials in a number of governmental and non-governmental institutions. Kim's claims, if true, reach to the highest echelons of power in South Korea and have already resulted in denials from Samsung. Samsung Chairman Lee Keun-hee has also been implicated in the case for endorsing a policy of bribery and encouraging the advertising department to consider reducing contract agreements with media outlets critical of the conglomerate.

Chong Wa Dae called on lawmakers to reconsider the proposed bill. Cheon Ho-sun, the Blue House spokesman, said, "The investigation covers too great a period. It is a serious problem to have an investigation for 200 days." Cheon's remarks hinted that President Roh Moo-hyun might veto the bill without requesting modifications.

Meanwhile, the main opposition Grand National Party said today that it will also propose a bill aimed at the formation of an independent council. Under the GNP's proposed bill, however, the allegations of illegal father-to-son funds transfers would be excluded from investigation since the GNP thinks that it is a matter of a private company. In addition, the investigation as outlined in the GNP bill would cover the years after 2002, unlike the bill proposed by the three liberal parties, which sets the start date at 1997.

Please direct questions or comments to [englishhani@hani.co.kr]

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