Samsung chief Lee Jae-yong arrested in corruption investigation

Samsung Chairman Kun-Hee Lee has been in poor health for the past couple of years, and his only son, Jay Y. Lee, has assumed responsibility overseeing the conglomerate that makes up more than a fifth of South Korea’s gross domestic product.

The scandal centres on Choi Soon-Sil, who is accused of using her close ties with Park to force local firms to “donate” almost $70 million to non-profit foundations which Choi allegedly used for personal gain. At the parliamentary hearing last December, Lee confirmed he had private meetings with Park and gifted a horse worth 1 billion won ($875,500) to the daughter of Park’s confidante Choi Soon-sil.

Lee and the Samsung Group deny any wrongdoing. Lee, incidentally, has been undergoing grooming for the top post at Samsung after his father was incapacitated in 2014 due to a heart attack.

The Seoul Central court has rejected a request to issue an arrest warrant for President of Samsung Electronics Co Ltd, Park Sang-jin.

Samsung Electronics’ vice chairman was charged with embezzlement, bribery, perjury, concealment of criminal proceeds and illicit transfer of assets overseas.

In the meantime, President Park is now stripped of her powers due to this scandal and is waiting to see whether the Supreme Court will uphold the South Korean parliament’s decision to impeach her. Lee allegedly wanted to ensure that he would be next in line for Samsung’s lead role.

Samsung Group chief Jay Y Lee rides on an elevator as he arrives at the office of the independent counsel in Seoul, February 16, 2017.

The prosecutor is also preparing to bring bribery charges against President Park who can not be indicted while she is in office.

Samsung is also the world’s biggest maker of memory chips and flat screen TVs. Park awaits a final decision by the Constitutional Court on whether the impeachment will stand.

On Wednesday, Samsung Group repeated an earlier denial on its official Twitter account: “Samsung has absolutely never bribed the president seeking something in return or sought illicit favors”. Prosecutors have 20 days to indict Lee.

Koo Yong-wook, an analyst at Mirae Asset Daewoo, said a leadership vacuum at Samsung has a negative impact on the group’s stocks.