Samsung heir arrested in corruption scandal

A judge at the Seoul Central District Court said there is enough justification to issue the warrant for Samsung Electronics Vice Chairman Lee Jae-yong given the newly added charges and the newly collected evidences.

In addition to bribery, the prosecution also accuses Lee of embezzlement and perjury for having given several versions of the events during his appearances in courts.

Reuters reports that Lee, 48, is in custody at the Seoul Detention Centre, as prosecutors once again seek an arrest warrant over bribery allegations, having failed to gain one last month. The pension fund's current chief was arrested past year on suspicion of pressuring the fund to back the merger, which helped Lee increase his influence in Samsung Electronics without spending any of his money. It may take as long as 18 months for a trial or verdict, Bloomberg said. Samsung responded by saying it was trying to create long-term value for investors and the merger was necessary to sustain growth.

South Korea's special prosecutor's office has focussed its investigations on Samsung Group's [SAGR.UL] relationship with Park, who was impeached by parliament in December and has been stripped of her powers while the Constitutional Court decides whether to uphold her impeachment.

Lee's father and grandfather repeatedly had close brushes with the law but were never jailed.

A Samsung spokesperson, on the phone to The Register, refused to deny Lee had been arrested. In their second attempt, a spokesman for the special prosecutor said Tuesday that they found evidence of Lee concealing profit gained through criminal acts and hiding assets overseas. But the Saenuri Party (now the Liberty Korea Party) and the government denied all these charges, and Samsung also flatly denied having bought the horse for Jung.

The National Pension Service, a major Samsung shareholder, is suspected of supporting the merger on Choi's instruction. Specifically, Samsung wanted to merge two of its affiliated companies to give the younger Lee greater control over Samsung Electronics Co., the world's largest maker of smartphones and crown jewel of the conglomerate.

Samsung Electronics Co Ltd fell as much as 1.8% while Samsung C&T Corp dropped almost 4%.

  • Arturo Norris