Samsung Electronics’ ailing chairperson, Lee Kun-hee, was named by South Korean police yesterday as a suspect in an 8.2billion won (R90.36million) tax evasion case that involved the use of bank accounts held by employees.
A series of scandals have dogged the family of Samsung, the country’s biggest business empire.
The chairperson’s son Jay Y Lee, heir to the Samsung Group, was released from detention earlier this week, after an appeals court halved his sentence for bribery and corruption to two-and-a-half years and suspended it for four years.
Following a heart attack in 2014, the elder Lee, 76, has remained hospitalised in Seoul’s Samsung Medical Centre and is difficult to communicate with having shown little sign of recovery.
Until his imprisonment Jay Y Lee had been regarded as the de facto head of the group.
Police said the elder Lee could not be questioned due to his physical condition, and Samsung declined comment.“Samsung chairperson Lee Kun-hee and a Samsung executive managed funds in 260 bank accounts under names of 72 executives, suspected of evading taxes worth 8.2bn won,” Korean National Police Agency said, planning to send the case to prosecutors.
Police added that the accounts, holding some 400bn won, were found in the course of their probe into alleged improper payments for the renovation of Lee’s family residence.
The investigation into tax evasion harks back to the late payment of 130bn won in tax in 2011, though only 8.2bn of that sum falls within the statute of limitations, according to police.
The graft case that led to the younger Lee’s arrest last year and brought down the former president Park Geun-hye prompted Samsung to vow to improve transparency in corporate governance and grant heads of the group’s affiliates more autonomy from the Lee family.
The group dismantled its corporate strategy office in late 2017.
The new liberal government led by President Moon Jae-in elected after the corruption scandal promised to put family-run conglomerates under stronger scrutiny and end the practice of pardoning corporate tycoons convicted of white-collar crimes.
Though Jay Y Lee has not been seen back at the office since his release on February 5, members of the Korean business community expect him to take up the reins once again, and invest more in the business to create jobs that might help soothe public anger.
Returning home from prison, the younger Lee apologised for not showing his best side and said he would do his best, but did not give specifics on his business plans.
While he spent a year behind bars, Samsung Electronics, the world’s top semiconductors maker, earned record profit as it benefited from a memory chip “super cycle”.
It is not the first time the elder Lee has been investigated for tax evasion.
He was convicted in 2009 and later pardoned for tax evasion after being embroiled in a scandal that also involved the use of accounts held by trusted employees.
Police say they have since identified more such accounts.
Shares in Samsung Electronics rose 1.1percent compared to a 0.5percent rise in the wider market.
Generally, blue chip tech stocks rebounded.
– Reuters
