Prosecutor Seeks To Arrest Samsung Chief Due To Corruption

The special prosecutors’ office is seeking the arrest of following 22-straight-hours of questioning last week. The tech world is wondering how this latest scandal will affect Korean tech giant’s product lineup.

Regardless, the request to arrest the head of the country’s largest conglomerate, whose assets are equal to one-fifth of South Korea’s gross domestic product, marks another startling development in a scandal that has transfixed the country and brought it to a political halt.

The 48-year-old Samsung Electronics vice chairman faces allegations of embezzlement, offering bribes and of lying under oath during a parliamentary hearing into the scandal, a spokesman for the special prosecutors said on Monday.

Lee was questioned by an independent counsel team as a bribery suspect on Thursday. “We are examining the related testimony and evidentiary materials to date and carefully considering the legal principles for the criminal acts in question”, said team spokesperson Lee Gyu-cheol in a regular briefing on January 15. Choi has denied wrongdoing.

The scion is vice chairman of Samsung Electronics, the firm’s flagship subsidiary, and the de facto head of the group after his father suffered a heart attack in 2014.

The Special Prosecutors’ Office also said on Monday that it indicted former welfare minister Moon Hyung-pyo for the abuse of power and perjury. NPS, as then the largest institutional investor, had chose to support the merger after holding an internal meeting among its asset managers, not an independent panel. The bribes were alleged to be to gain favor of the state-run pension fund for the merger of two Samsung affiliates.

In a statement, Samsung denies the prosecution’s charges and says it expects the court to reject the arrest warrant. Now the Constitutional Court’s nine members need to return a two-thirds majority to oust Park, which will take up to six months.

Another business lobby, the Korea Chamber of Commerce and Industry, also urged the court not to approve the arrest warrant for Lee, citing an impact on the national economy if Lee is arrested.

The merger plan had faced strong opposition from some investors such as Elliott Management due to an “unfair” stock swap ratio which the opponents had said would damage shareholder value of C&T.

The Lee family is no stranger to controversy; Lee Kun-hee resigned from Samsung in 2008 after being found guilty in a slush funds scandal, and later returned to the company after receiving the second of his personal presidential pardons and serving on the International Olympic Committee. The money allegedly was in exchange for helping ensure a smooth transfer of power at Samsung to the younger Lee.