Samsung heir faces arrest for ‘bribing’ South Korea’s Park

THE SPRAWLING investigation into President Park Geun-hye of South Korea took a dramatic turn Monday with word that the de facto head of Samsung, one of the world’s largest conglomerates, faces arrest on charges that he tried to bribe the president.

A prosecutor’s call for the arrest of Jay Y. Lee, vice chairman of Samsung and the only son of Samsung's incapacitated chairman, Lee Kun-hee, brings new scrutiny to the deep ties between the handful of corporations that dominate South Korea and top government officials. Lee is accused of instructing Samsung subsidiaries to make multimilliondollar donations to the family of Park's confidante, Choi Soon-sil, and to two foundations Choi controlled in exchange for political favours from Park.

The special prosecutor, Park Young-soo, said the money represented bribes from Samsung. He said he had asked a Seoul court to issue an arrest warrant for Lee; it usually takes a few days for a court to decide whether to grant such a warrant.

If Lee is arrested, it will be a landmark in South Korea's efforts to fight corruption in the country's powerful family-controlled conglomerates, known as chaebol, and could disrupt his efforts to inherit management control of Samsung, whose tentacles in telecommunications, shipbuilding and a range of other industries reach throughout South Korea's economy.

Lee’s arrest on a bribery charge would further corner Park Geun-hye. During her current trial in the Constitutional Court, prosecutors representing the National Assembly, which voted December 9 to impeach her, argued that Park and Choi colluded to collect millions from Samsung and other big businesses and that the money was either coerced from businesses or was collected as bribes in return for political favours. Park and Choi have denied any wrongdoing.

Lee Kun-hee, the chairman, has been incapacitated since a heart attack in 2014. His son, Jay Lee, has since been running the conglomerate, which has an annual revenue of 270 trillion won ($229 billion). Its crown jewel, Samsung Electronics, alone accounts for 20 percent of South Korea’s total exports.

Like most corruption scandals in the chaebol, the trouble at Samsung stemmed from allegations that the company used bribery and other illegal tools to help the father transfer management control to his son.

In the current scandal, Samsung was accused of making donations for Choi in exchange for a decision by the governmentcontrolled National Pension Service to support a merger of two Samsung affiliates in 2015. NYT

Reuters Jay Y. Lee.