The South Korean trial of Samsung heir Jay Y Lee for alleged bribery took an unusual twist on Thursday as prosecutors said the company tried to conceal its gift of a billion won (R12m) horse by exchanging it for another animal.
Prosecutors disclosed a series of text messages, emails and memos among Lee’s lieutenants to support allegations Samsung Electronics originally gave the daughter of a presidential confidante a horse named Vitana V for athletic competitions. Once media scrutiny began, Samsung agreed to replace it with another called Vladimir, they said.
The charges came in Seoul central district court while Lee, the 48-year-old vice chairman, sat silently and occasionally sipped water. Lee and Samsung have denied any wrongdoing.
The case, which has been dubbed the “ trial of the century” in Korea, is exposing a murky web of ties between top government officials and the richest family in the country. President Park Geun-hye has been ousted from power and detained after the constitutional court concluded last month that she abused her power to funnel financial favours to longtime friend Choi Soon-sil. Lee’s ascension to the top of South Korea’s biggest conglomerate has been stalled as he remains in detention during the trial.
“Samsung and Choi Soon-sil realised that Samsung’s financial support should never be exposed as illegal and made a false contract to cover it up,” a prosecutor said during the trial.
The scandal has implicated some of the nation’s biggest companies that have donated tens of millions of dollars to foundations controlled by Choi, whose daughter Chung Yoo-ra is resisting extradition from Denmark. Park, Choi and Chung denied they did anything illegal while Lee said he did not seek government favours in return for donations.
Prosecutors have alleged that attempts to cover up Samsung’s contributions show culpability. The prosecution said that money for the Vitana-to-Vladimir replacement was supposed to be made through additional payments to a horse dealer named Andreas, in addition to a regular service fee of US$170 000/month.
“After providing support for Chung’s equestrian training, Lee had a chance to meet with the president and unlike before, the president thanked him,” Chang Choong-ki, a lieutenant to Lee, was quoted as saying in his answers to prosecutors disclosed at the hearing. Lee’s lawyers said the president was expressing a general sense of gratitude for Samsung’s role in the country.
The scandal has weighed on Samsung as the world’s biggest maker of smartphones tries to bounce back from last year’s recall of its Galaxy Note7 smartphone after some exploded. The Suwon, South Korea-based company said earlier in the day it had accepted more pre-orders for its new S8 smartphone than its previous version and was looking to regain consumer confidence.
The company also posted its best operating profit in nearly four years last week on the back of its workmanlike semiconductor and display units. Still, Lee’s detention on charges of bribery and embezzlement may delay long-term strategic moves at Samsung, such as acquisitions and restructuring.
The court proceedings are scheduled to end by late May under a law that fast-tracks cases initiated by a special prosecutor. Detained outside Seoul, Lee faces allegations that he provided donations to Choi in exchange for government backing for a 2015 merger that helped cement his control over his $260bn company. He has denied all charges.
Earlier this month, Exor, the largest investor in Fiat Chrysler, removed Lee from its board and said in an annual report that he was “not in a position to sign.” Lee had been re-appointed in 2015 as an independent director for a three-year term.