» Kim Sung-ho, the South Korean spy chief-designate

Kim Sung-ho, the South Korean spy chief-designate who has been accused of allegedly taking bribes from Samsung Group when he was a state prosecutor, is suspected of owning a pricey apartment in Seoul in his sister’s name after he bought it from Samsung Corp., the group’s construction and trading affiliate, via a favor from the conglomerate.

The new accusation was reportedly made by Kim Yong-cheol, who blew the whistle on Samsung last fall when he launched the first in a series of corruption allegations against Samsung. The former Samsung chief attorney is being questioned by an independent counsel, who has a mandate to conduct a special probe into allegations that the conglomerate borrowed the names of its top executives to hide slush funds in bank and stock accounts, bribed public officials and illegally transferred control of the group’s management from father to son.

Kim, the former Samsung attorney, appeared to have told the independent counsel on March 14 that Kim Sung-ho, who has been nominated to head the National Intelligence Service, telephoned him about the apartment back when he was a Samsung employee. “When I was serving as the head of Samsung’s legal department, though I can’t remember the exact time, Kim, the nominee, called and asked me to look for an apartment at Galleria Palace,” Kim, the former Samsung lawyer, was quoted as saying by a source. According to the source, Kim raised the new allegation on March 12, when he was questioned by the independent counsel as a “reference witness.”

After the receiving the phone call, the former Samsung attorney said that he called the president of Samsung Corp.’s housing division, who is only identified by the surname Lee, to deliver the request by the NIS nominee, who was a prosecutor at the time. It is believed that the former Samsung attorney told the independent counsel that he then gave the NIS nominee’s phone number to the Samsung Corp. president, saying, “Let’s give him one with a good view,” according to the source.

The Galleria Palace apartment, located in Jamsil-dong, in the Songpa district in southern Seoul, was sold in 2001 by Samsung Corp. and Hanwha Construction. The NIS chief-designate, Kim, 58, lives in a 164.3 square-meter unit on the 33rd floor in one of the buildings that is part of the apartment complex. Real estate brokers estimate the apartment is trading at between 2.1 billion won (US$2.1 million) and 2.4 billion won. A real estate broker said, “The home (of Kim, the nominee) is more expensive than other apartments of the same size because it has a good view of the Seokchon Lake.”

Records show that the apartment is owned by the NIS nominee’s 69-year-old sister, but Kim has lived in the apartment since she acquired it in 2005. The NIS nominee moved to the apartment on April 4, 2005, after signing a rental contract under South Korea’s unique “jonse” system, which allows a tenant to pay a sizable deposit to the landlord and pay no rent. At the time, the NIS nominee paid his sister 370 million won for the deposit. Kim was quoted as saying that he gave his sister another 100 million won when the contract was renewed in December 2007.

At present, the average deposit for an apartment of the same size under a jonse contract is between 600 million won and 700 million won.

Currently, the NIS nominee’s sister is the sole tenant in an apartment in Busan worth some 190 million won and acquired under a separate jonse contract. Since May 2007, she had lived in another apartment in Busan with a mortgage worth some 250 million won. The Hankyoreh has attempted to call the nominee’s sister repeatedly, but she has just hung up the phone.

In response, a person close to the NIS chief-designate said, “There were no telephone calls made between Kim, the former attorney, and Samsung Corp. officials about the purchase of the apartment.”

Asked whether the NIS chief-designate borrowed his sister’s name to take ownership of the apartment, the person said, “At that time, the sister had enough money to buy the apartment on her own because she sold her cookie factory in Busan.”

An official at Samsung Corp. said, “Though it’s right that the apartments were sold in conjunction with Hanwha, all of them were sold legally and no favors were given. I have the understanding that the president was not involved in the sale in any way,” the Samsung Corp. official said.

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