South Korea starts special probe of Samsung Group
SEOUL (Reuters) - South Korea launched a special investigation into Samsung Group <SAGR.UL> on Thursday on suspicions the country's largest conglomerate bribed public officials to squash investigations into its management practices.
Samsung has warned the probe could upset its business operations but some analysts said the investigation could shed welcome light on the group's secretive leadership.
South Korea's parliament approved the special counsel in November in response to allegations made by a former top legal executive at Samsung, who said the company used its subsidiaries to help create a 200 billion won ($213.4 million) slush fund.
Samsung has denied the accusations, calling them groundless, and issued detailed rebuttals of the claims made by its former legal executive Kim Yong-cheol.
The special counsel legislation allows the team about 100 days to conduct its investigation.
South Korean prosecutors have been conducting a separate probe. Kim, who waited about three years after leaving Samsung to make his allegations in late 2007, said the company bribed senior members of the prosecutors office.
In December, soon after Kim's allegations, the country's top financial watchdogs said a bank and a brokerage had violated banking rules on naming account holders in setting up accounts for the Samsung Group.
Kim said Samsung set up accounts in employees' names as a way to hide money for slush funds.
Best known for Samsung Electronics <005930.KS>, the world's top maker of LCD screens and memory chips, the Samsung Group wields enormous power in South Korea.
It had sales in 2006 of $159 billion, about equal to one-sixth of the country's gross domestic product. With almost 60 affiliates, it accounts for about one-fifth of the country's exports and stock market value.
(Reporting by Jon Herskovitz and Mee Hyoe Koo; Editing by Alex Richardson)