Samsung heir becomes suspect in South Korea's widening influence peddling scandal

Jay Y. Lee attends a prize ceremony in Seoul, South Korea, on June 1, 2015. PHOTO: REUTERS

SEOUL (AFP) - Samsung heir Lee Jae Yong has become a criminal suspect in a widening probe into the corruption and influence-peddling scandal engulfing impeached South Korean President Park Geun Hye, prosecutors said on Wednesday (Jan 11).

Mr Lee, vice-chairman of Samsung Electronics and son of Samsung Group chairman Lee Kun Hee, would be quizzed as a "suspect" in connection to bribery, prosecutors said.

"We have decided to question Lee tomorrow morning... as a suspect," Mr Lee Kyu Chul, spokesman for the team of special prosecutors investigating the scandal, told reporters.

The affair centres on Ms Park's secret confidante Choi Soon Sil, who is accused of using her ties to Ms Park to coerce top firms into "donating" tens of millions of dollars to two non-profit foundations which Choi then used as her personal ATMs.

Samsung was the biggest contributor to the foundations. It is also accused of separately giving millions of euros to Choi to bankroll her daughter's equestrian training in Germany in a bid to win favour.

Prosecutors have for months questioned Mr Lee, 48, and other senior Samsung officials. The officials reportedly argued that although they were coerced to offer money, they sought no favours in return and thus the payments were not a bribe.

Spokesman Lee said prosecutors "left open the possibility" of formally arresting the Samsung scion later.

Prosecutors are investigating whether Samsung bribed Choi in order to win state approval for a controversial merger which it sought in 2015.

The merger of two Samsung group units - Cheil Industries and Samsung C&T - was seen as a crucial step towards ensuring a smooth third-generation power transfer to Mr Lee Jae Yong.

It was criticised by many, who said it wilfully undervalued Samsung C&T's stocks. But the National Pension Service (NPS) - a major Samsung shareholder - voted in favour of the deal and it eventually went through.

Prosecutors have raided multiple Samsung offices as well as the NPS in connection with the scandal. The fund - the world's third largest pension fund - is overseen by the welfare ministry.

A former welfare minister was arrested last month for allegedly pressuring NPS officials to vote in favour of the Samsung deal.

Ms Park, who stands accused of colluding with Choi to extract money from the firms, was impeached by parliament last month but denies any criminal wrongdoing.

The Constitutional Court is currently reviewing the validity of her impeachment.

Choi is on trial for charges including coercion and abuse of power.

Join ST's Telegram channel and get the latest breaking news delivered to you.