Lee Jae-yong is the only son of the conglomerate’s ailing chairman and was recently appointed to the board in what was viewed as a major step towards his eventual succession as chairman of the conglomerate. Local media reports allege that Samsung gave corporate funds to Choi Soon-sil, a close personal friend of the president, to gain influence. Samsung is said to have signed a contract of more than $18 million with Choi’s company and made a donation of an additional $17 million to two nonprofit foundations whose funds were reportedly meant for Choi’s personal use.
According to reports, one of the favors that Samsung could have received was the government’s backing on the controversial merger of Samsung C&T and Cheil Industries in 2015. The Lee family was the biggest beneficiary of this merger and it allowed them to further cement their grip on the empire. South Korea’s pension fund, the biggest shareholder in Samsung C&T, voted in favor of the merger even though its advisors recommended against it. The majority shareholder’s vote was crucial in getting the merger approved.
Two Samsung executives, including a man that’s known as Lee’s mentor, were questioned in connection with this case a few days back. Samsung Group has not yet commented on the matter. During a public hearing before legislators last month, Lee said that he wasn’t aware of the company’s decision to fund Choi’s companies and nonprofits. He also denied the allegation that Samsung tried to win favors through bribery.
