Korea influence scandal: Authorities raid unit of Cheil

SEOUL - Prosecutors in Korea yesterday raided the offices of a Cheil sport-related unit located in the Samsung Group headquarters, a Cheil spokesperson has confirmed.

The authorities seized hard disks and documents from the offices of the Sports Strategy Planning Division in connection with an ongoing investigation of Choi Soon-sil, a longtime friend of the country's president, Park Geun-hye.

The unit supports sport-related external affairs work for sports organisations in Korea, such as the Korea Skating Union, the Cheil spokesperson added, while stressing that it's not known whether the raid is directly related to these tasks.

The Yonhap News Agency reported that prosecutors suspect the Samsung Group gave business favors to Choi, including paying 3.5 billion won (US$3 million) to a company in Germany owned by Choi and her daughter Chung Yoo-ra, allegedly to fund Chung's equestrian training.

"The last time raids like this happened was eight years ago with Samsung's Lee Kun Hee case," Greg Paull, principal at R3, told Campaign Asia-Pacific. "It's going to be a challenging period in South Korea's business environment until there's more government transparency."

This past weekend, the prosecution called in Lee Jae-yong, Samsung Electronics vice chairman and the heir apparent of the group, to undergo questioning over cash given to nonprofit foundations connected to Choi, According to reports. Choi is in custody over suspicions of peddling influence and profiting through her friendship with the president.

Park is also accused of giving Choi access to classified information. The president, whose approval rating has plunged to a record-low level as the investigation has gathered steam, has retained lawyers and is expected to become the first sitting president to be questioned by prosecutors in a criminal case. The situation has sparked large protests, and officials from Lotte Group, Hyundai Motor Group, and Hanjin Group have also been questioned, according to news reports.

This story was been updated after initial publication to add details of the Sports Strategy Planning Division's work.