Published: Fri, February 17, 2017
Global Media | By Garry Long

Samsung's billionaire heir tries to avert arrest in court

Samsung's billionaire heir tries to avert arrest in court

A South Korean court on Friday ordered the arrest of Jay Y. Lee, the 48-year-old head of the Samsung Group, on suspicion of bribery and other charges in a corruption scandal that led parliament to impeach President Park Geun-hye.

Lee Jae-Yong, Samsung Electronics vice chairman, is accused of paying almost $40 million in bribes to Park's secret confidante to secure policy favours.

Samsung is South Korea's largest business group and its revenue is equivalent to about a fifth of the country's GDP. Lee is being investigated on an additional charge of perjury, the prosecution office said without elaborating. 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.

Samsung watchers have said Lee's arrest would not affect the day-to-day running of group companies including Samsung Electronics Co Ltd, which are run by professional managers, but a prolonged absence could impact longer-term and strategic decision making.

The case involves whether or not millions of dollars in payments from Samsung to businesses and foundations run by an associate of the President's - Choi Soon-sil - constituted a bribe, and if Lee had any personal dealings with the contributions.

Park, whose impeachment will be upheld or overturned by the Constitutional Court, has also denied wrongdoing.

An earlier request for an arrest warrant had been denied, but the charges against Lee have expanded since then.

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Lee's arrest is likely to put greater public focus on three key executives at the sprawling conglomerate.

Some group watchers dismissed that likelihood, noting that Lee Boo-jin does not have experience at the flagship Samsung Electronics or hold a significant stake in the company.

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 favours".

Prosecutors are probing whether Samsung had paid Choi to secure state approval for the controversial merger of two Samsung units seen as a key step towards ensuring a smooth power transfer to Lee.

The merger in 2015 of Samsung C&T and Cheil Industries was opposed by many investors who said it wilfully undervalued the former unit's shares.

Lee Jae-yong took over the Samsung conglomerate in October 2016, after his father, Lee Kun-hee, suffered a heart attack in May 2014, which still keeps him hospitalised and unable to communicate.

Park, who remains in the presidential Blue House, could become the first democratically elected leader in South Korea to be forced from office.

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