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How ties to an ‘equestrian princess’ landed Samsung at center of a scandal

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How ties to an ‘equestrian princess’ landed Samsung at center of a scandal

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Samsung Sponsorship Ties Company to Park Scandal

  Samsung electronics 005930  sponsorship of the daughter of President Park Geun-hye’s close friend has placed South Korea’s top company at the center of a widening influence-peddling scandal.   In 2015, Samsung agreed to pay $18 million to Core Sports International GmbH, a firm run by Park’s friend Choi Soon-sil. Choi now faces trial for abuse of power and fraud. Her daughter, 20-year-old equestrian Chung Yoo-ra, benefited most from the deal. A South Korean court has issued an arrest warrant for Chung on charges tied to academic fraud and other crimes.   Prosecutors are investigating whether Samsung sought favors from Choi and Park in exchange for financial support. They are examining if those favors included the National Pension Service’s backing of Samsung’s founding family in a major shareholder vote last year.   “We are looking into why Samsung and the Korea Equestrian Federation supported Choi and her daughter and sent funds to her companies,” a special prosecutor told Reuters.   Park, already impeached by parliament, awaits a Constitutional Court ruling that could remove her from office.   Horse Named Vitana V   Reuters reviewed Samsung’s 2015 sponsorship contract with Core Sports. The deal outlined plans for a six-rider team with 12 horses at a German training center. But the team never grew beyond Chung and her coach Park Jae-hong.   Samsung ultimately spent about 8 billion won ($6.6 million) on the venture, including $962,000 for a horse named Vitana V. Jay Y. Lee, Samsung’s heir and de facto head, admitted during testimony that the deal was inappropriate but said he faced “inevitable circumstances.”   Chung could not be reached for comment. Her lawyer, who also represents Choi, did not respond. Choi denied pressuring Samsung for sponsorship. Samsung declined comment.   Elite Sport, Political Links   Samsung also donated 1.6 billion won to a foundation run by Choi’s niece and more than 20 billion won to two foundations tied to Park’s policies. Prosecutors say Choi secretly controlled those groups. Jang Si-ho, Choi’s niece, claimed she founded her group to help athletes but admitted Choi pushed Samsung to support it.   Lee told lawmakers Samsung gave money without expecting political favors. Prosecutors raided Samsung offices twice but have not charged company officials.   Samsung, a long-time Olympic sponsor, has invested in South Korean sports for two decades. But equestrianism, a sport of the wealthy elite, had only 251 registered riders in 2014. Samsung’s founding family also has close ties to the sport. Lee himself competed internationally and won medals in the 1980s and 1990s.   Fake Documents and Fallout   Samsung left the Korea Equestrian Federation (KEF) in 2010 but returned in 2015 when its executive Park Sang-jin became chairman. Lawmakers accused the KEF of granting Chung undue favors, including a national team spot.   Chung earned the nickname “Equestrian Princess” but partly silenced critics by winning gold in team dressage at the 2014 Asian Games. Still, South Korea’s culture ministry later revealed the KEF accepted fake documents from Chung to excuse school absences and claim volunteer credits.   Samsung gave the KEF 2.6 billion won between 2015 and 2016. Some reports say Samsung has since canceled its contract with Core, now renamed Widec Sports GmbH.   Hwang Young-shik, a gold medalist who once competed with Chung, said the scandal has humiliated the sport. “Young riders are frustrated,” he said. “Everyone in equestrian circles knows who Chung Yoo-ra is now.”  

 
An outside view of the equestrian sports farm 'Reitsportanlage Jaegerhof' in Biblis, Germany, December 19, 2016. REUTERS/Ralph Orlowski

An outside view of the equestrian sports farm ‘Reitsportanlage Jaegerhof’ in Biblis, Germany, December 19, 2016. REUTERS/Ralph Orlowski

 

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