Bernard Arnault’s Dior is at the center of a South Korean political scandal after First Lady ‘gifted’ $2,000 bag

A $2,000 Dior bag has found itself as the subject of a major political crisis that threatens to displace South Korea’s President months before an election.

The “Dior bag scandal,” as it is being dubbed in South Korean media, unraveled this week as the country grapples with hidden footage showing Kim Keon Hee, the First Lady of President Yoon Suk Yeol, receiving the bag as a gift from a pastor.

The pastor, Choi Jae-young had implored the First Lady to encourage reunification with North Korea during a previous meeting. During that meeting, he says had overheard her discussing sensitive state information in a phone call and became worried about her role in South Korea’s administration.

Working with a YouTube channel that promotes rival left-wing politics, Choi then decided to covertly record their next conversation via a spy camera concealed in his wristwatch. He says he told Kim in advance about his plan to gift her the purse at the later meeting.

"A normal person would then say, 'Reverend, I can't see you if you do this,'" Reuters reported him saying. "But the First Lady gave me the place and time."

In that later meeting, which local media reports as happening in September 2022, Choi was wearing the wristwatch when he presented the First Lady with the bag, valued at 3 million won ($2,240).

The Korean Herald reported it had received confirmation from the government that the bag was "being managed and stored as a property of the government," per the BBC.

Kim and her husband are being criticized by political rivals for accepting the gift, while President Yoon’s ruling People Power Party (PPP) has urged the pair to accept that accepting the gift was inappropriate.

Election tensions

The scandal couldn’t have come at a worse time as South Koreans prepare to go to the polls in April.

It has caused divisions in the party, with PPP’s leader Han Dong-hoon saying the gift could “be a matter of public concern.”

Yoon reportedly tried to get Han to resign following his remarks, though the pair have since mended their relationship, the BBC reports.

The furor over what appears to be a relatively low-stakes gift makes more sense given the context of Kim’s past.

The First Lady has faced plagiarism allegations for her PhD alongside accusations that she lied on her CV. South Korea’s opposition has also accused her of stock market manipulation.

South Korea is also highly sensitive to any hints of wrongdoing in its public offices. In 2019, the country set up an anti-corruption agency under the PPP’s political rival.

“The questions surrounding Kim’s propriety have consistently undermined Yoon’s image as a corruption-buster,” Jeongmin Kim, editorial director at Seoul-based information service Korea Pro, told the FT.

South Korea is a prime luxury market for major brands like LVMH, which owns Dior.

Vogue Business reported that luxury goods sales had grown by 30% in the country between 2018 and 2022, citing data from Euromonitor. According to a report from Time, luxury brands have jumped on “hallyu,” the phrase that represents South Korea’s wave of global popular culture breakthrough since the 90s.

This story was originally featured on Fortune.com