Samsung Heir Arrested In Corruption Probe

Posted: Feb 18 2017, 1:11am CST | by , in News | Latest Business News

 

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Samsung Heir Arrested in Corruption Probe
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Lee Jae-yong, Samsung Group's de facto leader, was formally arrested on Friday on charges of bribery in connection with a high-profile corruption scandal surrounding President Park Geun-hye and her friend.

With the Seoul Central District Court issuing the arrest warrant, Lee, Vice-Chairman of Samsung Electronics Co., became the first leader of the country's largest business group to be detained in a criminal probe, Yonhap news agency reported.

The investigation team, led by Independent Counsel Park Young-soo, requested the writ for a second time on Tuesday -- less than a month after its first request on Lee's charges of bribery, embezzlement and perjury was turned down.

In their second pursuit of the warrant, the prosecutors leveled more charges against the tycoon, including hiding criminal proceeds and violating the law on transferring assets abroad in the process of giving bribes to the President's friend Choi Soon-sil.

"The rationale for and the necessity of (Lee's) arrest is acknowledged considering the new charges and additional evidence collected," the court said.

The 48-year-old spent Thursday night at the Seoul detention centre awaiting the court's decision on Friday morning.

While prosecutors decide whether to indict Lee, he was forced to swap his mansion in Seoul for a 6.65 square meter cell equipped with a mattress, TV and a toilet. He was being held in a single cell and not allowed any contact with other prisoners, according to a detention centre official.

Prosecutors suspected that Lee gave or promised some 43 billion won ($36.3 million) worth of bribes to Choi in exchange for the government's backing of a merger of two Samsung affiliates in 2015.

The business arrangement was seen as critical for the smooth management succession of the group from ailing Samsung Electronics Chairman Lee Kun-hee to his only son Jae-yong.

Samsung admitted to making contributions to two non-profit foundations allegedly controlled by Choi and her Germany-based firm, but denied such contributions were related to the 2015 merger.

The investigation team on Thursday asked Acting President and Prime Minister Hwang Kyo-ahn to extend the probe by a month. Lee's arrest was expected to deal a blow to the President who repeatedly denied allegations that she had colluded with Choi in extorting massive amounts of money and favors from local conglomerates, including Samsung.

Several South Korean politicians welcomed Lee's arrest while some others expressed concerns about its possible impact on the nation's frail economy.

The main opposition Democratic Party said the arrest should pave the way for a thorough investigation into the President and the eradication of corruptive ties between businesses and the government.

The ruling Liberty Korea Party expressed "deep regret" for disappointing the public with the corruption scandal and wished Samsung would focus on its business without disturbance. "We humbly accept the justice's decision," its spokesman Rep. Kim Sung-won said. "We hope Lee will be tried in a fair procedure."

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