Moon Hyung-pyo, chief of National Pension Service (NPS), was placed under emergency detention for further interrogation on charges of illicit power abuse after the independent counsel extending the prosecution probe on irregularities of President Park Geun-hye’s inner circle suspected him of commanding the state fund to approve the merger plan of Samsung Group units at the order of the presidential office.

The independent counsel team decided to detain Moon, former health minister, after questioning him as a witness to bribery allegations on the president throughout the day and placed him under custody for 48 hours in fear of his destroying evidence as his testimonies contradicted with others. After 48 hours, the special prosecutors will decide whether to seek a warrant to make the remand formal.

President Park Geun-hye met separately with heads of major conglomerates including Jay Y. Lee who acted as the Samsung Group chief on behalf of bedridden father Lee Kun-hee, and reportedly asked for donations. Park’s controversial friend Choi Soon-sil who is accused of having enjoyed power akin to the president created two nonprofit funds that regularly demanded money from large companies.

The independent counsel team is investigating favoritism attached to the donations and suspects NPS’s backing of the merger between Samsung C&T and Cheil Industries that involved proxy battle with the opponent group led by U.S. hedge fund Elliot Management could have been one of the favors.

Moon is suspected of pressing the NPS to back the merger of the Samsung affiliates in July last year when he was heading the Ministry of Health and Welfare, which oversees the pension fund. The NPS, with a 10 percent stake in Samsung C&T, threw a decisive vote in favor of the merger of the Samsung affiliates, allowing Samsung Group’s founding family to tighten their control over the conglomerate.

Hong Wan-sun, a former head of the NPS’s asset management division who played a leading role in NPS’s favorable vote on the Samsung merger, also admitted that he acted upon an order from the health ministry. Moon has denied the allegations. The president, Samsung, and NPS all could face bribery charges upon the findings.

Samsung was the biggest donator to Choi’s organizations, having handed over 20.4 billion won ($17 million). It separately paid 22 billion won for equestrian training of Choi’s daughter Chung Yoo-ra.

By Lee Hyun-jung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]