Samsung heir faces arrest for bribery and extortion charges

Posted January 19, 2017

A South Korean court was deciding Wednesday whether to issue a warrant for the arrest of Samsung's de facto chairman for his alleged role in an explosive corruption scandal that has riveted South Korea.

Globally, Samsung finds itself at odds with movement to root out corrupt practices in business A heavily global market-dependent Samsung stands to face worldwide anti-corruption regulations and the loss of key leading company workers it acquired as drivers of future growth if bribery and embezzlement charges against Samsung Electronics Vice Chairman Lee Jae-yong and other senior managers by the special prosecutor investigating the Choi Sun-sil government interference case are upheld in court, experts predicted. Prosecutors have argued in that trial that Ms. Park and Ms. Choi colluded to collect millions from Samsung and other big businesses, either through coercion or through trades of political favors for bribes. He declined to disclose the exact amount.

A Seoul court said it will review the prosecutors' arrest request on Wednesday.

Samsung avoided what could have been a stunning fall for the princeling of the country's richest family who has been groomed to lead South Korea's most successful company.

The scion is vice chairman of Samsung Electronics, the firm's flagship subsidiary, and the de facto head of the group after his father suffered a heart attack in 2014. They needed the support of the National Pension Service, the world's third-largest pension fund and a major Samsung shareholder, and prosecutors allege that Choi put pressure on the fund to support the deal - which it did.

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"There is this widespread perception that the Lee family is above the rule of law", said Shim Jung-Taik, an author of several books on Samsung and its corporate culture. Lee has previously denied all allegations against him, though he reportedly admitted to some wrongdoing during his latest visit to the special prosecutor's office on Thursday.

Samsung Vice Chairman Lee Jae-Yong could soon be arrested on charges of corruption.

Samsung paid W20.4 billion to the Mir and K-sports foundations, another W21.3 billion to Core Sports, a paper company Choi ran in Germany, and W1.6 billion to a winter sports foundation headed by Choi's niece. In response, Lee's legal team said that Samsung Group was the victim of extortion.

Park remains in office, pending a High Court decision on whether she will be impeached. "We believe the court will make a wise decision". Lee is facing three charges - bribery, embezzlement and perjury.

In a statement on Monday, Samsung also denied paying bribes or making "improper requests related to the merger of Samsung affiliates or the leadership transition".