Prosecutors seek to arrest Samsung scion

Mr Lee (above) arriving at the office of the independent counsel in Seoul for questioning last Thursday. He is accused of ordering his company to give bribes to Choi, in return for government support for a 2015 merger of two major Samsung affiliates.
Mr Lee (above) arriving at the office of the independent counsel in Seoul for questioning last Thursday. He is accused of ordering his company to give bribes to Choi, in return for government support for a 2015 merger of two major Samsung affiliates.PHOTO: EUROPEAN PRESSPHOTO AGENCY
Mr Lee arriving at the office of the independent counsel in Seoul for questioning last Thursday. He is accused of ordering his company to give bribes to Choi (above), in return for government support for a 2015 merger of two major Samsung affiliates.
Mr Lee arriving at the office of the independent counsel in Seoul for questioning last Thursday. He is accused of ordering his company to give bribes to Choi (above), in return for government support for a 2015 merger of two major Samsung affiliates.

South Korea's special prosecutors have sought an arrest warrant for Samsung scion Lee Jae Yong on bribery and other charges linked to the corruption and influence-peddling scandal that led to President Park Geun Hye's downfall.

Mr Lee, the tech giant's vice-chairman, is accused of ordering the company to give bribes amounting to 43 billion won (S$52 million) to Ms Park's close friend, Choi Soon Sil, in return for government support for a 2015 merger of two major Samsung affiliates, so as to pave the way for his succession.

Some 20 billion won was donated to two non-profit foundations set up by Choi, allegedly for her own personal gains. The rest was funnelled to a Germany-based sports firm owned by Choi, supposedly to sponsor her daughter, an equestrian athlete.

Ms Park was impeached by Parliament last month after being embroiled in the scandal. While the Constitutional Court is reviewing whether to uphold her impeachment, a separate team of special prosecutors is conducting its own investigations into the case.

Besides applying for Mr Lee's arrest warrant yesterday, the probe team also indicted National Pension Fund chief Moon Hyung Pyo for abusing his power to exert pressure on the state pension fund to support Samsung's US$8 billion (S$11.4 billion) merger deal in 2015.

Mr Lee, 48, met President Park privately twice after the merger, in July 2015 and February last year.

Earlier investigations by the Seoul court had revealed that Ms Park colluded with Choi to pressure Samsung and other conglomerates into making huge donations to the two foundations started by Choi.

Mr Lee allegedly did so in return for the pension fund's earlier support.

As he had denied these allegations at a parliamentary hearing last month, the special prosecutors have decided to press perjury charges against him as well.

The special probe team acknowledged that Mr Lee's arrest, if approved by a Seoul court tomorrow, could affect the economy.

Samsung, after all, is South Korea's largest family-owned conglomerate and contributes more than 20 per cent to the country's gross domestic product.

Some business lobby groups have urged the court not to grant the arrest warrant, while analysts warned that a leadership vacuum could deal a huge blow to Samsung, still reeling from the global recall of its Galaxy Note 7 phablet last year.

South Korea shares dipped 0.61 per cent on the main Korea Composite Stock Price Index yesterday, while Samsung Electronics shares fell 2.14 per cent.

A spokesman for the probe team said it decided to seek the arrest warrant as "it is more important for justice to be served".

Samsung has denied the allegations against Mr Lee, grandson of the company's founder Lee Byung Chul and son of its ailing chairman Lee Kun Hee. In a statement, the company maintained that it did not make donations to receive favours.

Meanwhile, Choi has firmly defended Ms Park ,while denying all allegations against her in a Constitutional Court hearing yesterday.

She said it was a "total distortion" that she meddled in state affairs, and that Ms Park is "not the kind of person" who hankers after personal benefits and grants special favours.

The court has until June 6 to make a decision regarding Ms Park's fate. If it upholds impeachment, she would have to step down and the next presidential election must be held within 60 days.

A version of this article appeared in the print edition of The Straits Times on January 17, 2017, with the headline 'Prosecutors seek to arrest Samsung scion'. Print Edition | Subscribe