Scandal fallout
Samsung chief arrested on bribery and other charges
Prosecutors on Friday arrested the de facto head of South Korea’s largest conglomerate, Samsung, on bribery and other charges related to a political corruption scandal that triggered the impeachment of President Park Geun-hye.
In a fresh blow to the electronics giant’s corporate image, a district court cited new evidence in approving the arrest warrant against vice-chairman Lee Jae-yong, who oversees the family-run conglomerate in the absence of his ailing father.
Among other allegations, Lee is accused of paying nearly $40 million in bribes to a confidante of President Park to secure policy favors.
“It is acknowledged that it isnecessarytoarrest(LeeJaeyong) in light of a newly added criminal charge and new evidence,” a court spokesman said in a statement.
Shares of many Samsung units took a hit on the Seoul stock market following the news, with the group’s flagship Samsung Electronics sliding 0.4 percent.
“We will do our best to ensure that the truth is revealed in future court proceedings,” the group said.
Lee was being held at a detention center after appearing in court on Thursday as judges deliberated whether to issue the arrest warrant. He will remain in custody as he awaits a trial.
Prosecutors said they planned to summon him on Saturdayforfurtherquestioning, raising the prospect of Lee appearing in public in handcuffs — a rare sight in the nation dubbed the “Republic of Samsung” due to the group’s huge lobbying power.
Lee, the son of Samsung boss Lee Kun-hee, has been questioned several times over hisallegedroleinthescandal.
The 48-year-old, described as a key suspect, narrowly avoided being formally arrested last month, after the court ruled there was insufficient evidence.
But prosecutors on Tuesday made a second bid, saying they had collected more evidence in recent weeks.
His arrest, the first for a Samsung chief, will send shock waves through the group, which is a major part of the South Korean economy and includes the world’s largest smartphone maker, Samsung Electronics.
“This is a blow to Samsung’s image as a global player in the short term”, said HMC Investment Securities’ analyst Greg Roh.
The company is already reeling over the recall of its flagship Galaxy Note 7 device and reports have suggested it could face sanctions from overseas authorities if Lee is punished.
Lee’s father and grandfather had several close brushes with the law but were never arrested.