Samsung Group chief faces arrest, accused of paying millions in bribes

South Korea's special prosecutors' office said it will seek a warrant to arrest the head of Samsung Group, the country's biggest conglomerate, as a corruption scandal engulfing President Park Geun-hye escalated on Monday.

Decision to approve the arrest warrant, related to government scandal, to be made Wednesday

Jae-Yong Lee, vice chairman of Samsung is shown last week at the office of the independent counsel in Seoul. (Chung Sung-Jun/Getty Images)

South Korea's special prosecutor's office said on Monday it was seeking a warrant to arrest the head of Samsung Group, the country's largest conglomerate, accusing him of paying multi-million dollar bribes to a friend of President Park Geun-hye.

Samsung Group chief Jay Y. Lee was questioned for 22 straight hours last week as investigators probed a corruption scandal that resulted in parliament impeaching Park last month.

The special prosecutor's office accused Lee of paying bribes totalling 43 billion won ($36.42 million US) to Choi Soon-sil, a friend of the president who is the woman at the centre of scandal.

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

Seoul's central district court said a hearing would be held at 10:30 a.m. on Wednesday to decide whether to approve the warrant.

"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.

Pro-government activists take part in a rally denouncing the impeachment of South Korea's President Park Geun-Hye in Seoul on January 14, 2017. Park was impeached by parliament last month over an influence-peddling scandal involving a secret confidante that sparked a storm of public fury and nationwide protests. / AFP / Ed JONES (Photo credit should read ED JONES/AFP/Getty Images) (AFP/Getty Images)

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.

Prosecutors have been looking into whether Samsung's support for a business and foundations backed by Park's friend Choi may have been connected to the National Pension Service's 2015 decision to support a controversial $8 billion merger of two Samsung Group affiliates.

NPS chairman Moon Hyung-pyo was indicted on Monday on charges of abuse of power and giving false testimony. Park remains in office but has been stripped of her powers while the Constitutional Court decides whether to make her the country's first democratically elected leader to be forced from office. 

Pension service head indicted Monday

Moon was arrested in December after acknowledging ordering the world's third-largest pension fund to support the $8 billion merger in 2015 while he was head of the health ministry, which oversees the NPS. Samsung has acknowledged providing funds to the three institutions but has repeatedly denied accusations of lobbying to push through the merger.

Choi is accused of colluding with Park to pressure big businesses, including Samsung, to contribute to non-profit foundations backing the president's initiatives.

Choi Soon-sil, the woman at the centre of the South Korean political scandal and long-time friend of President Park Geun-hye, is shown Monday at a court session in Seoul. (Kim Hong-Jim/AFP/Getty Images)

Choi, in detention and on trial on charges of abuse of power and attempted fraud, again denied wrongdoing on Monday in an appearance at the Constitutional Court. She also denied having any prior knowledge of the Samsung Group's controversial 2015 merger of two affiliates.

"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.

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

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

Shares in group flagship Samsung Electronics, the world's top maker of smartphones, flatscreen TVs and memory chips, extended losses on Monday afternoon and were down 2.3 per cent.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.