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Technology Samsung Cheil

Samsung HQ raided as part of corruption scandal linked to president and $8bn Cheil merger

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By Tony Connelly, Sports Marketing Reporter

November 23, 2016 | 3 min read

Samsung’s South Korean offices have been raided by authorities as part of a corruption investigation linked to last year’s $8 billion merger with Cheil Industries.

Samsung

The raid relates to last year's merger with its affiliate firm, Cheil Industries

Prosecutors are looking into whether President Park Geun-hye’s confidante and close friend, Choi Soon-sil, accepted bribes from Samsung executives in exchange for influencing key players in approving the controversial merger with Cheil Industries.

The allegations accuse Samsung of giving £2.5m (€2.8m euros/$3.1m) to a company co-owned by Choi and her daughter, in return for president Park's support for the deal.

A Samsung Group spokeswoman confirmed prosecution officials had visited the group's headquarters but could not provide further details.

The National Pension Service (NPS) offices were also raided as part of the investigation. The NPS held around 10% of Samsung, making it the largest shareholder of the company and a crucial figure in pushing the merger through. The investigation is reportedly looking into claims that its approval of the deal came under mysterious circumstances.

It’s alleged that Choi, who was indicted on Sunday (20 November) and charged with abuse of power, used her close position with the president to put pressure on the NPS to vote in favour of the merger.

NPS has defended its decision in the face of criticism that the deal helped the Lee family, the Korean dynasty that founded Samsung, to cement control of the merged firms at the expense of other shareholders.

"The reason we approved the merger was due to taking a comprehensive view of the merger's synergy effect and potential for stock value increase," it said in a statement last week.

The raids indicated that prosecutors are expanding their investigation into allegations of influence-peddling in a corruption scandal that has unsettled Park's presidency over the relationship between the government and big businesses.

President Park’s lawyer has refused prosecutors requests to question her about the case.

Technology Samsung Cheil

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