South Korea's pension fund chief arrested

Prosecutors are investigating if NPS chairman Moon Hyung Pyo pressured the pension fund to support a merger last year.
Prosecutors are investigating if NPS chairman Moon Hyung Pyo pressured the pension fund to support a merger last year.

SEOUL • South Korean prosecutors put the chairman of the world's third-largest pension fund under emergency arrest yesterday in a widening influence-peddling scandal that has led to Parliament voting to impeach President Park Geun Hye.

The special prosecutor's office did not provide further details on the arrest of National Pension Service (NPS) chairman Moon Hyung Pyo. Officers raided his home on Monday on suspicion of abuse of power.

The special prosecutor has been looking into whether he pressured the pension fund to support the US$8 billion (S$11.6 billion) merger last year of two Samsung Group affiliates when he was head of the Ministry of Health and Welfare, which runs the NPS.

Investigators are also examining whether Samsung's support for a business and foundations backed by Ms Park's close friend Choi Soon Sil, who is at the centre of the influence-peddling scandal, may have been connected to NPS support for the merger, a prosecution official told Reuters last week.

The NPS chairman said on Tuesday, as he arrived at the prosecutor's office, that he would cooperate and did not comment when asked if he pressured NPS to vote for the merger.

NPS had 545 trillion Korean won (S$653.6 billion) under management at the end of September and was a major shareholder in Samsung Group affiliates Cheil Industries Inc and Samsung C&T Corp when they merged last year.

Investors criticised the tie-up for strengthening the founding family's control of Samsung Group, South Korea's largest chaebol (conglomerate), at the expense of other shareholders.

NPS voted in favour of the merger without calling in an external committee that sometimes advises it on difficult votes.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 29, 2016, with the headline 'South Korea's pension fund chief arrested'. Print Edition | Subscribe