Bloomberg News

Samsung Group Headquarters, Chairman's Home Raided

January 15, 2008

South Korean special prosecutors raided Samsung Group's Seoul headquarters and the chairman's home, widening their probe into allegations the country's largest industrial group bribed government officials and prosecutors.

Chairman Lee Kun Hee's home and two of Samsung Group's data centers were searched today, Yun Jung Sok, a spokesman for the investigation, said during a briefing in Seoul. Yim Jun Seok, a group spokesman, earlier today declined to comment beyond saying prosecutors raided Samsung's strategic planning office.

The special prosecutors have about 100 days to complete the investigation, which was approved by President Roh Moo Hyun in November and formally began Jan. 10. The probe is in response to allegations by Samsung's former chief attorney, Kim Yong Chul, that the group amassed funds to bribe government officials, prosecutors and journalists. Samsung Group has denied the claims.

Yesterday, special prosecutors raided Lee's office in Seoul, the home of Samsung Electronics Co. (005930) Vice Chairman Lee Hak Soo and six other places, Yun said.

Samsung Group, with about 130 trillion won ($139 billion) in assets and 59 units, is the parent of Samsung Electronics, Asia's biggest maker of chips and mobile phones. Other subsidiaries include shipbuilder Samsung Heavy Industries Co. and Samsung Fire & Marine Insurance Co.

In November, South Korean lawmakers approved a bill authorizing an investigation into the slush-fund allegations and whether Samsung's chairman and executives illegally helped Lee's son, Lee Jae Yong, get control of group units. The probe will also look into the lobbying of presidential candidates during the 2002 election.

To contact the reporter on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net

To contact the editor responsible for this story: Anthony Spaeth at aspaeth@bloomberg.net


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