» Hong Ra-hee, the wife of Samsung Group Chairman Lee Kun-hee, as she enters the office of the independent counsel, who is investigating allegations that she used slush funds to buy artworks, on April 2.

The independent counsel investigating allegations of a slush fund and other questionable transactions involving Samsung Group Chairman Lee Kun-hee and his family members summoned Lee’s wife, Hong Ra-hee, for questioning as part of the probe.

Hong, 63, the director of Leeum Samsung Museum of Art, has been accused of allegedly buying expensive foreign artworks with Samsung slush funds, which a former chief attorney of Samsung claims, were raised via massive accounting fraud committed by the group’s affiliates.

Hong appeared at the independent counsel’s office at 3:00 p.m. on April 2. Despite of a barrage of questions by journalists, including whether she used her own money to buy the painting “Happy Tears” by American pop artist Roy Lichtenstein, Hong said, merely, “I will answer (the independent counsel’s questions) sincerely” and went into the office occupied by the investigation team.

An official with the special investigative team, led by independent counsel Cho Joon-woong, said, “As far as I’m aware, Hong will not be summoned again.”

Questions for Hong focused on learning how she had raised the money to buy the artworks and where the money had come from. It was believed that senior prosecutor Kang Chang-woo, who is one of the members for the independent counsel’s team, tried to clarify whether Hong used the money she had inherited from her father-in-law, Lee Byung-chull, the late founder of Samsung, or illegal corporate funds to buy the art pieces. Previously, Samsung had said that Hong used money inherited from her father-in-law to purchase the artworks.

In addition, Hong was believed to have been questioned about why accounts that held funds that came from dividend payments made by Samsung Life Insurance and the bank account of former Samsung attorney Kim Yong-cheol were used to buy the art works. The accounts used to buy the art were in Kim’s name and the names of Samsung LIfe employees.

Questioning also focused on whether Hong was involved in transaction with Seomi Gallery Director Hong Song-won and Kukje Gallery Director Lee Hyeong-sook.

Also at issue is whether Hong is the real owner of thousands of works of art stored in a warehouse owned by Everland, Samsung’s amusement park affiliate, and whether she bought 30 expensive art works, including “Happy Tears,” from Christie’s auction house in New York.

Last year, state prosecutors investigating the allegations against Samsung said they found circumstantial evidence indicating that 100 billion won (US$102.6 million) held by Samsung in dummy accounts was used to buy a number of expensive artworks. The biggest suspicion surrounding Hong is whether she used her own money to make the purchases.

Hong is likely to argue that she did use her own money for all of the art purchases, and will deny allegations that she bought “Happy Tears,” with slush funds. This was just one of the allegations brought by Kim, Samsung’s former chief attorney, who said that the family of the chairman had spent billions of won from the conglomerate’s illegally amassed slush fund to purchase artworks, including the famous painting. The painting went missing soon thereafter, only to reappear briefly earlier this year in a showing at the Seomi Gallery. Hong says that she had kept the painting for four to five months and returned it to Hong Song-won, the director of the Seomi Gallery because she claimed not to have liked it, according to the testimony of the Seomi Gallery director in a prior round of questioning.

The scope of questioning also included an inquiry about a memo submitted by former Samsung attorney Kim to the investigative team on January 14. The memo was written by Kim after he heard from one of the Seomi Gallery director’s attorneys in 2004. At that time, the Samsung chairman’s wife was under investigation by prosecutors on charges of violating the foreign currency transaction law. The memo said that the wife of the Samsung chairman had purchased artworks by Cy Twombly and Ed Ruscha, two of her favorite artists, and said that Lee Myung-hee, the chairman of Sinsegae and the mother-in-law of Samsung Electronics executive Lee Jae-yong, were on the Seomi Gallery director’s client list. Lee Jae-yong is the only son of the Samsung chairman, and has himself been a subject of the Samsung investigation for allegations that Samsung Group transferred its management rights from father to son illegally.

In addition to the allegations about the artworks, Hong was believed to have been questioned about what she knew of the management transfer, in which Everland sold its convertible bonds to Jae-yong at below market prices in 1996. At that time, the Samsung Culture Foundation, which was headed by Hong, gave up its rights to buy the Everland bonds worth 520 million won and allowed her son to buy the bonds.

“In 2006, Hong sent a written statement to prosecutors as one of those accused in the Everland case,” said the official with the independent counsel’s team. “Based on this, the inquiry focused on insufficient parts of that statement.”

In a telephone interview with The Hankyoreh on the same day, Kim, the former Samsung attorney, said, “When I worked for Samsung, I was told by Vice Chairman Lee Hak-soo that Hong had expressed her deep concern about how the group’s management control was transferred to Jae-yong via the issue of convertible bonds from Everland.”

After questioning Hong, the independent counsel’s team said it would complete its probe into the art allegations and does not plan to summon her again. Some critics claimed, however, that the questioning of Hong could just be the investigative team’s attempt at putting on a show after an internal decision made by the team to clear her of allegations related to the artworks.

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