South Korean prosecutors to indict Samsung's de facto chief

Posted March 01, 2017

The bribery allegation surfaced as authorities expanded investigations into a political scandal that led to Park's parliamentary impeachment. Per the reports, Samsung was one of the highest single donor of Choi's foundation, which he had created to help Park with her policy initiatives.

Some of the executives will resign and leave Samsung, but Lee is expected to stay on as de facto head of the company if there is a trial. Samsung has denied wrongdoing.

The four executives, who all face the same charges as Lee except perjury, are the Samsung group's vice-chairman, Choi Gee-sung, and president, Chang Choong-ki, as well as Samsung Electronics' president, Park Sang-jin, and executive vice-president, Hwang Sung-soo.

Authorities are about to formally indict Lee on multiple charges, including bribery and embezzlement.

In the meantime, the special prosecutor's probe into Park's former aide Woo Byung-woo still remains unresolved, though it is ready to be handed over to state prosecutors as from February 28.

Vice Chairman Lee is suspected of paying tens of millions of United States dollars in bribes to Choi in exchange for getting support in the controversial merger in 2015 of two Samsung affiliates to create a de-facto holding company.

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Samsung already announced its intention to disband the Corporate Strategy Office, the decision-making unit at the company, which has been linked to the corruption investigation.

Lee's involvement in the scandal around the shocking impeachment of South Korea's President Ms.Park was a big part of the indictment.

Choi, the central figure in the scandal, is accused of using her close ties with Park to strong-arm Samsung and other local conglomerates to offer large "donations" to non-profit foundations, which she allegedly used for personal gain. Lee Kun-hee is reportedly in no shape to take back control of Samsung while his son is in court, and he's also been mired in scandal repeatedly in recent years over charges of tax evasion and bribery. However, major business groups criticised the arrest, concerned about the impact on Samsung and, more broadly, on South Korea.

Despite the indictment of a group of key executives at Samsung Group, don't expect the South Korean conglomerate to miss a beat, at least in the short term.

At that time, it was customary for presidents to pardon business leaders, acknowledging large companies' past and future contributions to the national economy.

Jay Y. Lee was not among the resignations, suggesting he will keep his position and board membership at Samsung during the court proceedings.