For the second time in less than a month, Samsung offices were raided by prosecutors in South Korea. Raids were conducted at Samsung's offices and at South Korea's National Pension Service over allegations that the presidential office influenced the pension fund to back the merger plan of two of Samsung's affiliates in 2015.
The National Pension Service in South Korea – the world's third largest with about $460bn (£370) in assets – held 11.6% stake in Samsung C&T Corp and a 5% stake in Cheil Industries Inc, the company with which Samsung merged.
Prosecutors are investigating whether beleaguered South President Park Geun-hye got the pension fund to support Samsung in return for favours given to a close associate Choi Soon-sil, who was indicted last week on corruption charges.
This is the third time the tech giant and the country's largest family-run business has been raided over the latest scandal surrounding President Park and Choi and the second time in less than a month. Samsung did not comment on the latest raid.
Meanwhile, the role of the pension fund has been questioned because as per laws, such mergers are supposed to be reviewed by an independent panel that advises the state fund in exercising voting rights. But the state-run agency chose to ignore the law and gave approval for the merger.
Although the deal faced some opposition from individual shareholders, led by US hedge fund Elliott Associates, it was ultimately approved. Many speculated that the move was an attempt to hand over power from group owner Lee Kun-hee – who has been unwell for a while – to his son Lee Jae-yong, considered heir apparent to the business group.
In recent weeks, many Samsung executives have been questioned with regards to the deal including Lee. The scandal mounts on one of Korea's largest companies even as the firm's reputation is at stake following the Galaxy Note 7 recall that is expected to cost the company billions of dollars.