SKorean investigators raid Samsung head office: Officials

SEOUL: Investigators on Tuesday raided the headquarters of South Korea's largest group Samsung as part of their probe into claims it operated a huge slush fund for bribery, officials and media reports said.   

Samsung officials speaking on condition of anonymity confirmed a search was underway in the building in central Seoul but had no other comment.   

YTN cable television news and Yonhap news agency said the independent counsel appointed to probe the claims sent dozens of investigators to search Samsung's strategic planning office.  

The office coordinates activities of affiliates and is directly under the supervision of group chairman Lee Kun-Hee.   

Group spokesmen could not be reached for comment on the operation, which follows an unprecedented search of the homes of Lee and other executives on Monday.   

The independent counsel launched its investigation last week into claims by Samsung's former chief lawyer that it created a multi-million-dollar slush fund to bribe prosecutors, government officials and journalists.   

Legislators from all parties had voted in November to set up the independent inquiry despite objections from the government, which said it would tarnish Samsung and the country. The probe, which can last up to 105 days, is seen as a test of South Korea's determination to crack down on allegedly shady business practices by family-controlled conglomerates.   

Samsung, which wields enormous influence, has denied the bribery claims. Its group assets are valued at $280.8 billion and exports were worth 66.3 billion dollars last year, more than 20 percent of the nation's total.   

The head office raid was the boldest action so far taken by the team led by Cho Joon-Woong, a former senior state prosecutor.   

Yonhap said a search was underway of both the 27th floor, where the strategic planning office is located, and the 28th floor where the offices of Chairman Lee and vice chairman Lee Hak-Soo are sited.   

Kim Yong-Chul, who headed Samsung's in-house legal team for seven years until 2004, has accused the conglomerate of opening bank accounts in the names of senior staff including himself to manage the slush fund.   

Kim has claimed he had taken part in creating the fund totalling over seven trillion won ($7.5 billion).   

Yonhap said state prosecutors, who mounted an earlier inquiry before handing over their findings to Cho, had scrutinised 1,000 accounts opened under the names of 150 former and current executives.    Apart from the slush fund claims, the investigation will consider whether illegal funds were provided during and after the last presidential election in 2002.   

Another key allegation it will consider involves the murky transfer of the ownership of Everland -- Samsung's de facto holding company -- from the chairman to his son Jae-Yong.   

Senior Samsung executives were convicted in 2005 and last year of involvement in the illegal ownership transfer, but are appealing.   

Samsung Electronics, the group's flagship, said separately Tuesday its net profit dropped 6.6 percent year-on-year in the fourth quarter to December amid falling prices for computer memory chips.   

The world's largest memory chip maker said it earned 2.212 trillion won ($2.36 billion) on sales of 17.48 trillion won in the quarter.