South Korean prosecutors raided National Pension Service (NPS) and Samsung Group’s Future Strategy Office on Wednesday as part of the high-profile investigation on power abuses of President Park Geun-hye and her friend Choi Soon-sil upon suspicion that the presidential office had a part in influencing the state pension to agree to a mega-merger plan of the conglomerate in return for receiving generous illicit funds.

State prosecutors confiscated documents and computer files from the office of pension fund headquarter office in Southern Seoul and also searched the NPS headquarters in Jeonju, North Jeolla Province as well as the offices of Choi Ji-sung, head of Samsung’s decision-making Future Strategy Office, and Hong Wan-sun, a former director of the fund’s Fund Investment Office on the same day.

The NPS owning 10 percent stake in Samsung C&T had a decisive role in the shareholders’ meeting on July 17 last year approving its merger with Cheil Industries proposed two months earlier and contested publicly by U.S. activist hedge fund Elliott Management claiming the merger would undermine the shares of Samsung C&T to merely serve Samsung Group’s Lee family at the expense of the shareholders.

The merger was narrowly approved at Samsung C&T’s general shareholders’ meeting in July. The state-run fund threw a vote of approval without going through the advisory board meeting even when all the domestic and foreign proxy groups including Institutional Shareholders’ Services Inc. (ISS) and Korea’s Corporate Governance Service advised against the move.

Samsung is reported to have been the most eager patron of Choi and her daughter, making the biggest donations to Choi’s nonprofit organizations that collected 77.4 billion won ($65.8 million) from large companies. The conglomerate is suspected of having handed money to the presidential office to press NPS to vote in favor of the merger plan. If proven, Samsung could come under bribery charge.

As of 12:45 p.m. on Wednesday, shares of Samsung C&T fell 2.85 percent to 136,500 won in Seoul trading.

By Lee Hyun-jung

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