The Financial Supervisory Service has recently found evidence of suspicious stock transactions in more than 700 bank accounts under the names of incumbent and former executives of Samsung Group and has launched an investigation into Samsung affiliates, including Samsung Securities. The FSS received a request for investigation into the accounts from the independent counsel investigating allegations against the nation’s largest conglomerate.

In a telephone interview with The Hankyoreh on March 4, a high-ranking official at the nation’s financial watchdog said, “Regarding the first 20-30 bank accounts for which an investigation was requested by the independent counsel, FSS agents are examining whether the accounts, held by Samsung Securities, violated the real-name financial transaction law. The FSS has also launched an investigation into approximately 700 additional accounts to confirm if they violated a law on stock transactions.” The law bars companies and individuals from opening bank or stock accounts under names other than their own. Samsung Group was alleged to have opened several of these dummy accounts in the names of its current and former executives to hide a network of slush funds which the conglomerate used, in part, to bribe public officials.

“The FSS examined stock transactions made under false-name accounts and found signs that they had been used to trade shares of Samsung subsidiaries,” said the official, indicating that the FSS has already confirmed that the borrowed name bank accounts were used for share price manipulation. It was confirmed that the FSS formed a separate team of nine experienced investigators to examine potentially illegal stock transactions at Samsung. Another FSS official said that its team will have almost full authority to trace the bank accounts and follow the flow of money. With the data, which was handed over by the independent counsel, the FSS will be able to prove whether Samsung was involved in illegal stock transactions, the official added.

Some predict, however, that it will take a long time to prove the allegations against Samsung Group. In ordinary share price manipulation cases, the number of accounts involved is about 30 to 40. In the Samsung case, that number is much higher and it is assumed that stock prices have been manipulated for longer than 10 years, going back to 1995 or 1996.

In the meantime, the prosecution’s special investigation headquarters confirmed in December that Samsung’s strategic planning office posted considerable financial gains from the stock price increase after the office purchased forfeited shares that became available when shares in Samsung affiliates were put up for public sale. The shares in Samsung Securities, Samsung Electronics and Samsung Heavy Industries were purchased under the names of current and former executives.

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