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Samsung Group offices get raided again in political scandal

The parent company of Samsung Electronics has been ensnared in the "Choi-gate" corruption probe facing South Korean President Park Geun-hye.

Samsung Electronics' parent company has been linked to the political scandal in South Korea.
Shara Tibken/CNET

Samsung Group's offices have been raided for a third time in connection with the political scandal roiling South Korea.

South Korean prosecutors raided the offices of the Samsung Electronics parent company on Wednesday, Yonhap News reported. Samsung Group confirmed the raid in an email to CNET but said it didn't have more information to share.

Authorities also raided South Korea's state-run pension fund "over allegations that the presidential office influenced the pension fund's decision to back Samsung's merger plan last year," the publication said.

Samsung Group has many various holdings along with its electronics business. Last year, it completed an $8 billion merger between its C&T Corp. construction and trading business, and Cheil Industries fashion and chemicals business to solidify the Lee family's hold on the company. Samsung Chairman Kun-Hee Lee has been ailing for the past couple years, and his son, Jae-Yong Lee, is slated to take over management of Samsung. Combining C&T and Cheil gave the younger Lee a bigger stake in the companies. Some shareholders contested the merger, but it still was approved in July 2015.

The South Korean pension fund, which held an 11.6 percent stake in Samsung C&T and a 5 percent stake in Cheil Industries, according to Yonhap, was important in approving the merger. Authorities now are looking at whether South Korean President Park pressured the fund to back the merger in return for Samsung giving favors to Park's friend and long-time confidante Soon-sil Choi, the publication reported.

Along with the latest raid, Samsung's offices were raided earlier this month over allegations that it donated $3.1m to a company co-owned by Choi, who was arrested on November 3.

South Korea's government has been in turmoil over allegations that President Park confided in her friend Choi, who has no official role in the government. Prosecutors have indicted Choi and two of Park's former aids for extortion, fraud and divulging classified information. Park has cut ties with many in her government but hasn't caved to demands that she resign. Hundreds of thousands of protesters have gathered every weekend for the past month to protest what's been dubbed "Choi-gate."

Update at 4:40 p.m. PT with confirmation from Samsung Group.