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(2nd LD) Samsung Group's former chief pleads not guilty at corruption trial
By Kim Hyun
SEOUL, June 12 (Yonhap) -- Former Samsung Group chairman Lee Kun-hee apologized on Thursday for causing concerns about Korea's largest conglomerate, but pleaded not guilty to most charges of tax evasion and breach of trust at the opening of his trial.
"I deeply apologize," a gray-suited Lee said at a Seoul Central District Courtroom, packed with an audience of about 200.
"For the past 20 years, I've lived looking forward, with my only belief that (Samsung) should win in the race with foreign companies. Looking back, I realize I have not reflected enough on myself and my surroundings," he said.
For Lee, who resigned shortly after being indicted in April, the court appearance was his first in more than a decade. He stood trial in 1995 along with several other heads of conglomerates for bribing military rulers.
Following a three-month probe sanctioned by parliament, a special prosecutor indicted Lee and nine other Samsung executives, including former Vice Chairman Lee Hak-soo, on charges of evading 112.8 billion won (US$109.6) in taxes. Seven of them attended as defendants in the first hearing.
The former chairman is also accused of orchestrating the murky transfer of group control to his son, Jae-yong, in the mid-1990s. Jae-yong acquired a major stake of the theme park Everland, Samsung's de-facto holding company, at 7,700 won a share in 1996, when the market price was deemed to be 85,000 won.
Jae-yong's murky stock takeovers in Everland and other Samsung affiliates sparked accusations that Lee evaded taxes in transferring his group control to his son. Samsung has claimed management executives engineered the takeovers.
It is now up to the court to decide whether or to what extent Lee was involved in the illegal wealth transfer.
"Such deals would never have been possible without systematic preparations by the group's secretarial office" of Lee, the special prosecutor said.
He called for the court's stern judgment to "eradicate the illegal business customs of the old days" among Korea's family-run conglomerates.
Lee's representatives denied most of the charges. They noted that the 1990s, during which the crimes allegedly occurred, were Samsung's most formative years in its rise to the international stage.
"It was the time when Chairman Lee Kun-hee was spending all his energy for Samsung Group to make a global leap," a lawyer said. "It was not a time when he could become so complacent to think about the transfer of group control."
The defense acknowledged Samsung's tax evasion, but cited "business customs 10 years ago," in which entrepreneurs would not voluntarily pay taxes until the government bills them.
If convicted, Lee could face life in prison. Recent court rulings, however, have handed down suspended prison sentences to business leaders, citing concerns of their influence on the Korean economy. In the latest such verdict, Hyundai Motor Chairman Chung Mong-koo received a suspended jail term for embezzling 90 billion won and incurring damages to affiliates worth 210 billion won by transferring stocks to his son at lower-than-market prices.
Lee is expected to receive his verdict in mid-July.
The investigation was initiated by a former Samsung lawyer, Kim Yong-chul, who raised allegations of corruption against Lee. Kim's central claim that Samsung created huge slush funds to routinely bribe public officials, however, was dismissed by the special prosecutor who found no evidence to substantiate the claim.
After his indictment, Lee quit his job of 20 years, and executives including the vice chairman followed suit. The group announced a drastic overhaul plan.
Lee took control of Samsung Group after the death of his father, conglomerate founder Lee Byung-chull, in 1987. The chairman was convicted in 1995 of bribing former President Roh Tae-woo.
Samsung accounts for nearly a quarter of South Korea's exports and gross national product. Among its 59 affiliates are Samsung Electronics Co., the world's biggest memory chipmaker, and Samsung Heavy Industries, the world's No. 2 shipbuilder.
hkim@yna.co.kr
(END)
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