A scandal is threatening to do some major damage to Samsung Electronics (OTC:SSNLF), and many North American investors have no idea anything is even going on.
It all began with the impeachment of South Korean President Park Geun-hye. Park has been accused of conspiring with Choi Soon-sil to extort money from some of South Korea’s largest companies in exchange for political favours.
Park had admitted to giving Choi access to sensitive political documents as well as allowing her to edit some speeches. Choi has no government experience. Choi’s father, Choi Tae-min, was an advisor to Park’s father, Park Chung-hee, who served as South Korea’s third president between 1963 and 1979.
This scandal has rocked South Korea, and it appears Samsung is being caught right in the middle of it.
Lee Jae-yong, who is the leader of the powerful company, was summoned to court on Wednesday over allegations he bribed Choi in exchange for business favors from Park. He will be held in custody until the courts decide whether or not to proceed.
We’re not talking about chump change here, either. Lee is accused of giving or promising 43 billion won ($36 million U.S.) in exchange for the government backing a proposed merger of two Samsung affiliates.
Prosecutors are pushing for formal charges to be filed, saying they have enough evidence to take the case to trial.
If Lee is convicted, this could be a major blow to Samsung, the largest company in South Korea. We just don’t know how deep this scandal really runs.
