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Politics

With Samsung raid, Choi probe turns to big business

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Investigators carry their haul of evidence from Samsung Electronics' headquarters.   © Reuters

SEOUL -- South Korean prosecutors raided Samsung Electronics' headquarters Tuesday for evidence in the influence-peddling scandal surrounding a close confidante to President Park Geun-hye, dragging one of the country's largest conglomerates into the widening investigation.

The electronics maker is alleged to have sent some 2.8 million euros ($3.09 million) to a company linked to former dressage competitor Chung Yoo-ra, the daughter of Choi Soon-sil, a longtime friend of Park's who the president is alleged to have involved in state affairs. Tuesday's raid turned up evidence of such transfers, according to South Korean media reports.

Samsung confirmed that the raid took place in a short statement Tuesday. The company will faithfully comply with the investigation, a Samsung source said. Park Sang-jin, Samsung Electronics' president of corporate relations, is the current head of the Korea Equestrian Federation. He is expected to say that the money was to fund development of the sport, and that the selection of Chung to represent South Korea in international competition was a coincidence.

Prosecutors have barred Park from leaving the country, and are expected to look into possible kickbacks from the Park Geun-hye government to Samsung.

The raid also furthers an investigation into donations by South Korean businesses to two nonprofits -- a sports foundation and a cultural foundation -- effectively controlled by Choi, worth some 77.4 billion won ($68.2 million) in total. Prosecutors have detained and questioned Ahn Chong-bum, the president's former secretary for policy coordination, over allegations that he worked with Choi to pressure companies to donate. Looking into the hazy origins of these funds will help investigators determine whether Park herself is directly involved in any of the growing number of graft scandals surrounding Choi.

South Korea's major conglomerates top the foundations' donor lists. Samsung Group, the electronics company's parent, gave the most at around 20.4 billion won. Lotte Group reportedly gave around 4.5 billion won. Lotte's donation is suspected to have been returned several days before the company's offices were raided in June as part of an investigation into a possible slush fund.

Corporate donors say they were merely supporting South Korean sports and culture by giving to the funds and have not acted illegally. But if large conglomerates refuse to cooperate, prosecutors would have little choice but to call business leaders as witnesses, a source linked to the prosecution said Tuesday. The arrest or detention of officials cannot be ruled out as the investigation continues.

South Korea's economy has stagnated of late, and the wage gap between full- and part-time or temporary employees is widening. If the country's leading conglomerates are discovered to have benefited by illegally donating to Choi, the anger of ordinary South Koreans, now directed mainly at Park, could lash the corporate sector as well.  

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