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South Korea's maverick prosecutor takes aim at heart of Samsung

Investigator will have to prove he can resist political pressure

Yoon Seok-Yeol, who was appointed chief of the Seoul Central District Prosecutors' Office in 2017, has built up a reputation for challenging authority.

SEOUL -- Lee Jae-Yong, the de facto head of South Korean giant Samsung Electronics, had managed to keep his distance from an investigation into alleged accounting fraud at the group's biotech arm Samsung BioLogics.

That changed last week when his closest adviser -- Chung Hyun-ho, Samsung Electronics' president -- was hauled in for 17 hours of questioning.

While Chung was eventually released without charge, the move was seen as an audacious attempt by Seoul's chief prosecutor, Yoon Seok-yeol, to take his investigation into Samsung right to the very heart of South Korea's most important company.

Yoon, 58, has a track record of challenging authority. The chief of the Seoul Central District Prosecutors' Office has arrested and indicted two former presidents for corruption, winning sentences that put them in prison for decades.

In 2013 he also accused his own boss of attempting to influence his investigation into allegations that South Korea's spy agency had meddled in the 2012 presidential election.

Now the maverick prosecutor appears to be targeting the most powerful businessman in the country, Samsung Electronics Vice Chairman Lee, who relies on Chung to help him run the conglomerate.

It is not the first time Yoon has had Lee in his sights. The Samsung boss was arrested and convicted two years ago in another Yoon investigation into bribery and corruption involving President Park Geun-hye. Lee, who denies all wrongdoing, is appealing against the conviction at the Supreme Court. 

Those who know Yoon say he is unique in the ranks of South Korean prosecutors, with a reputation for not yielding to political or corporate influence.

Lee Jae-yong, vice chairman of Samsung Electronics, is the third-generation heir of South Korea’s largest business group.    © AP

"Many prosecutors are susceptible to Samsung lobbying, but Yoon is an exception," said Seo Gi-ho, an attorney at Sangrok law firm who has worked as a judge in a Seoul district court and has known Yoon for six years. "He is strongly motivated to investigate."

Jun Sung-in, an economics professor at Hongik University who has studied chaebol, said the investigation so far sent a clear signal that Yoon had no intention of giving up.

The prosecution suspects that senior executives manipulated accounts of subsidiaries in an attempt to strengthen the Lee family's hold on Samsung Electronics through a controversial merger of two affiliated businesses. The value of one of the companies related to BioLogics was allegedly inflated with an accounting fraud to increase Lee's share of Samsung C&T, the de facto holding company of Samsung Electronics. 

Samsung Electronics denies all allegations. "We ask you to avoid excessive reporting... while the investigation is still ongoing," said the company in a statement.

But Yoon has taken his inquiry further than many expected by arresting several executives close to Lee, accusing them of destroying evidence related to the alleged accounting fraud.

Longtime investors in Korea say they are watching with interest the progress of the investigation. But the test of Yoon's effectiveness will be whether he is able to resist political concerns over destabilizing Samsung, a pillar of the South Korean economy despite current operational challenges, one said. "He will come under pressure," the investor said. "There will be a lot of pushback." 

Jun said Samsung's relationship with the establishment would be crucial in determining whether authorities would follow through, should any high profile charges be brought by prosecutors. "Relations between Samsung and the court, or Samsung and the government will be important," Jun said.

The result of Lee's appeal against his 2018 conviction on bribery charges would be a "turning point," Jun added. "Whether the Supreme Court will convict [Lee at the appeal case], or the government will pardon him” could signal its commitment to Yoon's investigation. 

Over the years, Yoon has paid a heavy price for his dogged pursuit of wrongdoing. After reporting the pressure from his superiors during the investigation into the spy agency's alleged interference in the 2012 election, Yoon was sidelined. He spent four years working in the provinces, where he was assigned to largely trivial jobs.

But, with substantial experience as an independent investigator in nationwide scandals, he was recalled in 2016 to work with Special Counsel Park Yang-soo to look into allegations of bribery involving former president Park and a close friend Choi Soon-sil.

Thanks to his contributions, which led to the president's eventual impeachment and conviction, he was chosen in 2017 by President Moon Jae-in to take charge of the country's biggest prosecuting body, the Seoul Central District Prosecutors' Office. The appointment drew attention as President Moon came to office after promising to root out the "evils" in the business sector, and to reform the country's powerful chaebol -- the family conglomerates that control a substantial share of South Korea's economy. 

It was with the power this new post brings that that Yoon renewed his assault on Samsung. But he will need the government's continued support if he intends to to continue. 

On Monday President Moon appointed him as South Korea's prosecutor general. Yoon is still subject to confirmation by the National Assembly. But if he passes the hearing for the two-year job,  South Korea's assault on corporate wrongdoing may well intensify.

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