South Korean prosecutors seek warrant to arrest Samsung head for bribery – Washington Post

Special prosecutors in South Korea are seeking to arrest the de facto head of Samsung, accusing him of bribery, embezzlement and perjury over his alleged role in a dramatic corruption and influence-peddling scandal.

The independent counsel investigating the case in parallel with the state prosecutors Monday asked a court to issue a warrant for Lee Jae-yong, who is officially the vice chairman of Samsung Electronics but, in effect, runs the corporate behemoth controlled by his family.

“The national economy is important, but upholding justice is more important,” said Lee Kyu-chul, spokesman for the independent counsel. Prosecutors had previously said that they would take into account the economic impact of arresting the head of the country’s largest conglomerate, which accounts for about one-fifth of South Korea’s exports.

A court will review the request Tuesday, and if judges decide to issue the warrant, prosecutors will be able to detain Lee while they continue their investigation and decide which formal charges to press.

Three other senior Samsung officials, including the chief executive of the flagship Samsung Electronics, were formally placed under investigation but warrants have not been sought for their arrest. This comes as Samsung Electronics tries to recover from its humiliating and costly recall of the Galaxy Note 7 smartphone, which developed a habit of catching fire.

A Samsung spokeswoman declined to comment Monday.

[Samsung heir questioned in South Korea’s sensational bribery scandal]

The request to arrest the head of Samsung marks another startling development in a scandal that has transfixed the country and brought it to a political halt.

The country’s president, Park Geun-hye, was suspended from duty in December after the National Assembly voted to impeach her and the Constitutional Court is now deciding whether to uphold the motion.

The scandal revolves around Park’s relationship with Choi Soon-sil, a lifelong friend who held no official position and had no security clearance yet was secretly advising the president on everything from North Korea policy to her wardrobe.

Choi is now on trial on charges including bribery, coercion and abuse of power. Several former aides to Park have also been indicted, and the head of the national pension fund, the world’s third largest, has been arrested.

Prosecutors allege that Choi took money from big businesses like Samsung and Lotte, ostensibly for two foundations that she ran, but that the money was in fact payment for Choi’s help in business deals. She is accused of taking almost $70 million from the business groups this way.

Samsung is also suspected of having agreed to an $18 million contract with a consulting firm owned by Choi and based in Germany, considered a front for funding Choi’s daughter’s equestrian training there.

In a hearing in the national assembly last month, Lee flatly denied any involvement in a bribery scheme, although he admitted that Samsung had bought a $900,000 horse for Choi’s daughter.

[South Korean court to begin considering President Park Geun-hye’s impeachment]

Lee was called into the prosecutor’s office last week for a marathon 22 hours of questioning about the scandal, following which the independent counsel Monday made its request.

The prosecutors accused Lee and Samsung of paying about $40 million in bribes through Choi to help secure favorable business treatment, partly in the form of donations to the foundations and partly as a contract with Choi’s consulting firm in Germany.

At the time, Samsung was trying to merge two key affiliates, an $8 billion that was part of the Lee family’s attempts to consolidate its control over the conglomerate, and needed the support of the national pension fund, a major shareholder. Prosecutors allege that Choi put pressure on the fund to support the deal — which it did — and pocketed the money.

“The independent counsel considers the amount as bribery related to Lee’s succession in Samsung,” the spokesman for the independent counsel said Monday.

The 48-year-old is the third generation Lee to run the conglomerate, which was founded by his grandfather as a small trading company before World War II but, with the support of Park’s father, former president Park Chung-hee, became a giant that sells everything from cell phones and ships to life insurance and hospital services.

Lee has been running the group since his father, Lee Kun-hee, was incapacitated following a heart attack almost three years ago. But because he remains unconscious in hospital, the youngest Lee has not assumed the chairman’s role.

Yoonjung Seo contributed reporting from Seoul.

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