Accused of Bribery, Arrest of Samsung Chief Jay Y Lee being Sought by South Korean Prosecutors

Accusing the head of Samsung Group, the country’s biggest conglomerate, of paying multi-million dollar bribes to a friend of President Park Geun-hye, South Korea’s special prosecutors’ office said it will seek a warrant to arrest Jay Y. Lee .

As investigators probed a corruption scandal that resulted in parliament impeaching Park last month, the Samsung Group chief was questioned for 22 straight hours last week.

Choi Soon-sil, a friend of the president who is at the center of scandal, was allegedly paid bribes totaling 43 billion won ($36.42 million) by Lee, according to the special prosecutors’ office.

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

A hearing would be held at 10:30 a.m. (0130 GMT) on Wednesday to decide whether to approve the warrant, Seoul’s central district court said.

“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,” Lee Kyu-chul, a spokesman for the office, told a media briefing.

Samsung said it could not accept the accusations that Lee paid bribes.

“It is difficult to understand the special prosecutors’ decision,” it said in an emailed statement.

Any links between the National Pension Service’s 2015 decision to support a controversial $8 billion merger of two Samsung Group affiliates and Samsung’s support for a business and foundations backed by Park’s friend Choi are being investigated by prosecutors.

On charges of abuse of power and giving false testimony, NPS chairman Moon Hyung-pyo was indicted on Monday.

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

In December, Moon acknowledged that while he was head of the health ministry, which oversees the NPS, he had ordered the world’s third-largest pension fund to support the $8 billion merger in 2015 and he was arrested after that acknowledgment.

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

Possessing prior knowledge of the Samsung Group’s controversial 2015 merger of two affiliates has been denied by Choi.

“Even if I knew, I could not have passed on any information because I have no knowledge about mergers or hedge funds, anything like that, in the first place,” Choi told the court.

With Park impeached in December, South Korea has been gripped by political crisis for months. Though admitting carelessness in her relationship with Choi, Park has also denied wrongdoing.

With former U.N. Secretary General Ban Ki-moon expected to be a candidate, an election would be held in two months if the impeachment is upheld by the Constitutional Court.

On Monday afternoon, shares in group flagship Samsung Electronics, were down 2.3 percent as the world’s top maker of smartphones, flatscreen TVs and memory chips, extended losses.

(Adapted from CNBC)

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