Samsung's Vice Chairman Is Under Arrest For A Massive Bribery Scandal

Alicia WestFeb 17, 2017

Samsung Group, South Korea's biggest business conglomerate, is on high alert on Friday as the group's de facto leader, Lee Jae-yong, has been formally detained over his alleged role in a widening corruption scandal that led to the impeachment of President Park Geun-hye.

At issue is whether millions in donations Samsung made to two foundations controlled by President Park's friend and confidant, Choi Soon-sil, were bribes to get the South Korean pension fund to back a merger between two of Samsung Group's holding companies.

The decision to add extra charges, which included hiding assets overseas, was made after a Seoul court denied prosecutors' first attempt to secure an arrest warrant for Lee last month, a spokesman for the special prosecutor's office said.

He was already being held at a detention centre after appearing in court Thursday as judges deliberated whether to issue an arrest warrant.

Park, whose powers were suspended in December by parliament, is awaiting a decision by the Constitutional Court on whether she will be permanently removed from the presidency.

Prosecutors accuse Lee in his capacity as the head of South Korea's largest conglomerate of pledging 43 billion won ($37.7 million) to a business and organisations backed by Choi in exchange for support of a 2015 merger of two Samsung companies.

"It is very regrettable that the court granted an arrest warrant against Vice Chairman Lee, although there is no flight risk or destruction of evidences", a Samsung official said.


In seeking Lee's arrest for the second time, the prosecutors said the Samsung heir faces new charges in addition to bribery, embezzlement and lying under oath.

Still, Lee, who has been put under a travel ban, confirmed he had private meetings with Park and that Samsung had provided a horse worth 1 billion won that was used for equestrian lessons by Choi's daughter. The scandal has rocked South Korea with millions of people taking to the streets in protest. An approval would also help bring bribery charges against President Park.

They are also seeking the arrest of the president of Samsung Electronics Co Ltd, Park Sang-jin, who also heads the Korea Equestrian Federation and attended Thursday's hearing with Lee.

His arrest is likely to send shock waves through the group, which is a major part of the South Korean economy.

Samsung has "never" offered bribes to the president expecting something in return nor has it sought wrongful favors, the company said.

The merger was personally reportedly beneficial to Lee, as it eventually led him to take over control of Samsung from his father. Its offices have been raided several times on suspicion that the presidential office influenced the decision by South Korea's state-run pension fund to back Samsung's merger plan past year.

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