Park Geun-hye’s trial turns up more evidence of Blue House meddling in Samsung merger

Posted on : 2017-05-30 16:44 KST Modified on : 2019-10-19 20:29 KST
Witness claims that committee of outside experts did not discuss whether to approve controversial merger
Former President Park Geun-hye appears for the first hearing in her trial on bribery charges
Former President Park Geun-hye appears for the first hearing in her trial on bribery charges

The South Korean government did not raise discussions on whether to approve the merger of Samsung C&T and Cheil Industries with a committee of outside experts advising on stock purchasing decisions by the National Pension Service (NPS), despite the committee’s request for it to do so, a witness in former President Park Geun-hye’s trial has claimed.

Witnesses also said the reason the NPS did not go through committee discussions was because “it was apparent the Blue House’s wishes.”

The third session of Park’s trial on May 29 under judge Kim Se-yun of the Seoul Central District Court’s 22nd criminal division included witness examinations of former Hanwha Investment and Securities CEO Chu Jin-hyung and former NPS expert committee chair Kim Sung-min.

“Given that Samsung‘s merger percentage hurt NPS stock value, that the SK merger was also discussed by the expert committee, and that it was a socially sensitive issue, we determined it to be a matter for review and voting,” Kim testified during the trial.

Kim also reported that some of the expert committee members “said that the committee’s authorities had been severely compromised and that they intended to resign” after the review did not take place. The approval of NPS, which owned an 11.21% share of Samsung C&T and a 4.84% share of Cheil Industries, would have influenced whether the two companies merged. But the Ministry of Health and Welfare and NPS declined Kim‘s request for an expert committee meeting, and on July 10, 2015, the Samsung merger was approved by an investment committee consisting of internal employees.

Chu, who was the only South Korean organizational investor who voiced opposition to the Samsung merger, claimed Blue House interference in NPS’s discussion process.

“When I asked [then-expert committee member] Chung-Ang University professor Park Chang-kyun [about the reason only the investment committee met], I was told, ‘They’re saying it’s the Blue House’s wishes,‘” Chu testified.

Chu previously testified under questioning by the special prosecutor that the Blue House was “the only thing that could have mobilized NPS on Samsung’s behalf.”

“From what the media is reporting, it looks like Samsung’s equestrian support is quid pro quo for the Blue House,” Chu said at the time.

Park was present at the trial with confidante Choi Sun-sil on May 29, but did not look in her direction. The former President was seen examining case records and talking animatedly with attorney Yu Yeong-ha. Park’s attorneys were also stopped by the judge for irrelevant questioning after asking Chu “why [former Blue House Senior Secretary to the President for Policy Coordination] Ahn Jong-beom wasn‘t indicted in the Samsung bribery case.”

By Kim Min-kyung, staff reporter

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