hankyoreh

Choi Sun-sil’s daughter Jung Yu-ra receiving equestrian lessons in Germany

Samsung was sending monthly payments of around 800,000 euros (US$888,000) to a German corporation owned by Choi Sun-sil, sources say.

The Hankyoreh recently learned this from someone who knows a former employee (only identified by the letter K) of a corporation that Choi set up in Germany. “‘K’ was working for Choi Sun-sil’s company in Germany, and Samsung had been wiring about 800,000 euros each month since before ‘K’ started working there. Since they had to use all the money to get another payment the next month, the company spent money like crazy,” the source said.

“‘K’ also claimed to have seen the president of a Samsung subsidiary go into the Schmitten Hotel in Germany where Choi’s local office was located and meet Choi there,” the source said.

“‘K’ worked at Choi‘s company from the end of last year until the beginning of this year and was in charge of handling all the office work, including processing receipts,” the source said. “K” reportedly got the job on the recommendation of the head of the German branch of a South Korean bank who had helped Choi with her life in Germany. When the Hankyoreh asked “K” for confirmation, “K” said “my knowledge is limited” but did not deny the truth of what the source had said.

In related news, the special investigating team at the Seoul Central District Prosecutors’ Office has reportedly launched an investigation after learning that Samsung Electronics wired 2.8 million euros in the second half of last year -- supposedly as a fee for consulting -- to Core Sports (currently called Widec Sports), a company that Choi set up in Germany. The Hankyoreh has not confirmed whether the monthly payments of 800,000 euros that “K” disclosed were included in the sum of 2.8 million euros.

“There is no truth to the claim that we wired 800,000 euros a month,” said a source for the Samsung Group.

Following the revelation that affiliates of the Samsung Group had contributed 20.4 billion (US$17.9 million) won to the Mir Foundation and the K-Sports Foundation, accusations were raised that the affiliates also made payments directly to Choi, suggesting that the prosecutors’ investigation will focus on the motives and the scale of this “assistance.”

“Samsung is the only company so far that has been confirmed to have given money directly to Choi without going through the foundations. An investigation will soon be launched into Samsung as well,” said a source with the prosecutors on Nov. 2.

Samsung has previously denied the factuality of reports by the European equestrian media that Jung Yoo-ra (Choi Sun-sil’s daughter) represented herself in Europe as part of the “Samsung team” and that she had purchased a dressage stable and a horse named Vitana V, which is estimated to be worth more than 1 billion won (US$875 million). The company has also claimed that Samsung Electronics President Park Sang-jin became chairman of the Korean Equestrian Assocation in Mar. 2015 out of personal interest and not on behalf of the group.

But what the prosecutors have learned by tracking bank accounts is that Samsung’s public statements contradict the facts. On Nov. 2, Samsung stated that it “would cooperate with the investigation” and did not deny that it had paid Choi’s company “consulting fees for managing horses and for training athletes.”

The owner of a dressage stable near Frankfurt where Choi and Chung were staying, told South Korean media outlet that he had heard from Chung’s associates that Samsung would be providing 20 million euros for training equestrian athletes for the 2020 Olympics in Tokyo.

It was also confirmed that the dressage stable in Emsdetten, Germany that the European media reported that Samsung had acquired for Chung’s equestrian training had been purchased for 2.3 million euros (US$2.55 million) in Feb. 2016 by a subsidiary of Monami, a South Korean stationery company. Three days later, Monami received an order from Samsung Electronics worth 9.9 billion won (US$8.64 million).

This is reinforcing suspicions that Samsung attempted to use “powerful figures in the shadows” to gain the “cooperation” of the Blue House. Around the time that a Samsung executive became the chairman of the Korean Equestrian Foundation, Samsung urgently needed to hand over control of the group’s management to Samsung Electronics Vice Chairman Lee Jae-yong.

Samsung had been working to reorganize the group investment structure, and it needed the help of South Korea’s National Pension Service, which is a major stockholder in Samsung subsidiaries (as was seen in the merger between Samsung C&T Corporation and Cheil Industries).

“The Federation of Korean Industries, which set up the K-Sports Foundation with money from major corporations, has been under the sway of Samsung since its establishment,” said one source in the business community.

By Lee Wan and Choi Hyun-june, staff reporters

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