Samsung boss's wife 'spent $64m slush fund on art'

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The Independent Online

The chairman of Samsung and his wife have long been viewed as Korea's golden couple. Lee Kun-hee stands at the helm of a multibillion-dollar conglomerate and his wife, Ra Hee Hong Lee, is director general of the Leeum, Samsung's Museum of Art.

But the couple's reputation has been bruised by accusations of corruption, influence peddling, an alleged 225m slush fund and the acquisition of millions of dollars worth of art, that has triggered an urgent investigation led by the country's National Assembly.

More than $64m (32m) from an alleged slush fund set up by the chairman was believed to have been used to buy artwork for Mrs Hong Lee, The Art newspaper said.

The couple's troubles began after Kim Yong-chul, the former head of the legal department of the Samsung Group Restructuring Office, called a series of press conferences unleashing the slew of allegations concerning a slush fund which, he claimed, was kept in the accounts of various Samsung executives. The fund, he alleged, was used to purchase millions of dollars worth of art for the chairman's wife and other members of his family. Mr Kim released a list of artworks bought including Roy Lichtenstein's Happy Tears, which was sold at Christie's New York in 2002 for $7,159,500, a record price for the artist at the time, Barnett Newman's White Fire I, David Hockney's Portrait of Nick Wilder, Ed Ruscha's Desire, Gerhard Richter's Abstract and works by Donald Judd and Agnes Martin.

Purchases of 30 paintings and photographs allegedly made at five sales at Christie's in New York were included on his list. In one sale alone in November 2002 more than $20m was spent on 10 works including Lichtenstein's masterpiece.

The National Assembly has since approved an independent investigation into the whole affair, and with Samsung's huge financial sponsorship of the arts under scrutiny, many other Korean corporations have ceased buying art until the waters settle, causing confidence in the country's art market to plummet.

Mr Kim particularly focused on the purchase of Lichtenstein's work, claiming that the painting was bought at the auction on behalf of the chairman's wife by Hong Seong-won, director of the Seoul-based Seomi Gallery, who is believed to have handled art purchases on behalf of the Samsung group since the 1990s. He added that Mrs Hong Lee would regularly call the Restructuring Office to ask for funds to be wired to the Seomi Gallery for the purchase of art.

Samsung, when contacted by The Art , denied the allegations in a statement, which read: "These allegations are completely groundless. We are co-operating fully with the current investigation. Neither Mrs Hong Lee nor Samsung Museum of Art purchased Happy Tears.

"Mrs Hong Lee was invited to view the work but she decided not to purchase it ... The 30 works of art included on the list were not purchased by Samsung, nor Mrs Hong Lee."

None of the art has been exhibited in Korea.

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