South Korea's special prosecutors to seek arrest warrant for Samsung Group leader Lee Jae Yong in influence-peddling scandal

Samsung Group leader Jay Y. Lee is surrounded by members of the media as he leaves the special prosecutors' office in Seoul, South Korea, on Jan 13, 2017.
Samsung Group leader Jay Y. Lee is surrounded by members of the media as he leaves the special prosecutors' office in Seoul, South Korea, on Jan 13, 2017.PHOTO: BLOOMBERG

SEOUL (REUTERS) -  South Korea’s special prosecutors’office said on Monday  (Jan 16) it was seeking a warrant to arrest the head of Samsung Group, the country’s largest conglomerate, accusing him of paying multi-million-dollar bribes to a friend of President Park Geun hye.

Samsung Group chief Lee Jae Yong was questioned for 22 straight hours last week as investigators probed a corruption scandal that resulted in parliament impeaching Ms Park last month.

The special prosecutors’ office accused Mr Lee of paying bribes totalling 43 billion won (S$52.1 million) to Choi Soon Sil, a friend of the president who is at the centre of scandal.

Mr Lee, who became the de facto head of the Samsung Group after his father, Lee Kun Hee, suffered a heart attack in 2014, was also accused of embezzlement and perjury in the prosecution’s application for an arrest warrant.

Seoul’s central district court said a hearing would be held at 10.30 am  (9.30am Singapore time) on Wednesday to decide whether to approve the warrant.

“The special prosecutors’ office, in making this decision to seek an arrest warrant, determined that while the country’s economic conditions are important, upholding justice takes precedence,” Mr Lee Kyu Chul, a spokesman for the office, told a media briefing.

Samsung said it could not accept the accusations that Mr Lee paid bribes. “It is difficult to understand the special prosecutors’decision,” it said in an e-mailed statement.

Prosecutors have been looking into whether Samsung’s support for a business and foundations backed by Park’s friend Choi may have been connected to the National Pension Service’s 2015 decision to support a controversial $8 billion merger of two Samsung Group affiliates. 

NPS chairman Moon Hyung Pyo was indicted on charges of abuse of power and giving false testimony on Monday, while Choi appeared before the Constitutional Court, denying wrongdoing.

Ms Park remains in office but has been stripped of her powers while the Constitutional Court decides whether to make her the country’s first democratically elected leader to be forced from office.

Moon was arrested in December after acknowledging ordering the world’s third-largest pension fund to support the US$8 billion merger in 2015 while he was head of the health ministry, which oversees the NPS.

Samsung has acknowledged providing funds to the three institutions but has repeatedly denied accusations of lobbying to push through the merger.

Choi is accused of colluding with Ms Park to pressure big businesses, including Samsung, to contribute to non-profit foundations backing the President’s initiatives.

Choi, in detention and on trial on charges of abuse of power and attempted fraud, again denied wrongdoing on Monday.

She said she had access to a former presidential aide’s email address which had Blue House - presidential office - documents, but that she only looked at Ms Park’s speeches for “emotional expression”.

Choi described Ms Park as “a person without ulterior motives” who “does not allow people to take private interest or take private interest herself”.

South Korea has been gripped by political crisis for months, with Ms Park impeached by the Parliament in December. She has also denied wrongdoing, though admitted carelessness in her relationship with Choi.

If the impeachment is upheld by the Constitutional Court, an election would be held in two months, with former United Nations Secretary General Ban Ki Moon expected to be a candidate.

Former opposition party leader Moon Jae In maintained his lead in an opinion poll for presidential favourites, while  Mr Ban tightened the gap in second place, a Realmeter survey commissioned by the Maeil Business Newspaper showed on Monday.

The special prosecutors’ office had said it would make a decision on Samsung’s Mr Lee on Sunday, but needed more time to deliberate all factors, including the potential economic impact.

The drama does not seem to have put off investors. South Korea rang in the new year with Asia’s first sovereign bond, pricing the US$1 billion, 10-year issue well below the initially indicated yield as global investors rushed to buy.