Samsung Heir Faces Arrest on Charges of Bribing South Korea's President

Posted January 19, 2017

After a almost four-hour interrogation session at the Seoul Central District Court, Lee, vice chairman of Samsung Electronics Co., was escorted to a detention center in Uiwang, south of the capital city, where he will wait for the court's decision. He was reportedly interrogated for more than 22 hours over the weekend, and faces charges of bribery, embezzlement, and perjury.

The 48-year-old, who remained silent as he arrived at the court, went to a detention center south of Seoul to await the decision, which is not expected until about midnight local time. The ruling is a setback for prosecutors including Han Dong-hoon, dubbed the "chaebol sniper" for his relentless pursuit of the country's conglomerates.

Lee Jae-yong had denied allegations of bribery involving embattled President Park Geun-hye and her personal adviser.

Samsung made the largest payments to Ms. Choi's foundations, totaling $17 million.

The National Pension Service, a major Samsung shareholder, is suspected of supporting the merger on Choi's instruction.

The scandal could even help Samsung in the long term, said Shim Jung-Taik, an author of several books on the firm, if it persuaded the founding Lee clan to improve the group's opaque governance structure and become more transparent.

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Samsung issued a statement on Monday denying that it paid bribes or made "improper requests related to the merger of Samsung affiliates or the leadership transition".

Numerous case's allegations revolve around the Lee family's suspected efforts to keep control of the corporate behemoth.

Prosecutors also suspect Lee of embezzling Samsung corporate funds and of lying under oath during a parliamentary hearing last month.

Prosecutors requested Lee's arrest for allegedly bribing Park and a confidante of hers, Choi Soon-sil, who is on trial for meddling in state affairs. Moon Hyung-pyo, the chairman of the pension fund, was indicted on Monday on charges that he illegally pressed the fund to back that merger when he was South Korea's health and welfare minister.

Lee Kyu-chul, spokesman of the independent counsel team, said a face-to-face interrogation of Park could be conducted as late as the beginning of February, Xinhua news agency reported. Samsung has largely been controlled by one family since its existence.

Lee's absence might have a limited impact on the day-to-day operations of Samsung, where each unit has its own CEO and overall business strategies are set by an elite team of executives at its Future Strategy Office. President Park has been already impeached and her powers suspended. While broader strategic decisions are dictated by the chairman of the company day-to-day operations are run by executives and managers of the company.