Sam­sung chief ar­rested on charges of brib­ing gov­ern­ment

Honolulu Star-Advertiser - - BUSINESS - By Choe Sang-Hun

SEOUL >> The de facto leader of Sam­sung, Lee Jaey­ong, was ar­rested to­day on bribery charges, a dra­matic turn in South Korea’s decades-old strug­gle to end col­lu­sive ties be­tween the gov­ern­ment and pow­er­ful fam­ily-con­trolled con­glom­er­ates.

Lee, vice chair­man of Sam­sung, one of the world’s largest con­glom­er­ates, was taken to a jail out­side Seoul, the cap­i­tal, soon after a judge at the Seoul Cen­tral Dis­trict Court is­sued an ar­rest war­rant early to­day.

Lee, 48, was ac­cused of pay­ing $36 mil­lion in bribes to Pres­i­dent Park Geun-hye’s se­cre­tive con­fi­dante, Choi Soon-sil, in re­turn for po­lit­i­cal fa­vors from Park, like gov­ern­ment sup­port for a merger of two Sam­sung af­fil­i­ates in 2015 that helped Lee in­herit cor­po­rate con­trol from his in­ca­pac­i­tated fa­ther, Chair­man Lee Kun-hee. Lee Jae-yong is the first head of Sam­sung, a sym­bol of power and wealth in South Korea, to face cor­rup­tion charges. Other charges against him in­clude em­bez­zle­ment, il­le­gal trans­fer of prop­erty abroad and com­mit­ting per­jury dur­ing a par­lia­men­tary hear­ing. An­a­lysts say his case is a lit­mus test of whether the coun­try’s rel­a­tively youth­ful democ­racy and ju­di­cial sys­tem are ready to crack down on the white-col­lar crimes of fam­ily-owned con­glom­er­ates, or “chae­bol,” among which Sam­sung is the big­gest and most prof­itable.

His ar­rest is also a hard­won vic­tory for the spe­cial pros­e­cu­tor, Park Young-soo, who has been strug­gling to es­tab­lish a bribery case against Lee and Park Ge­un­hye.

Lee, who also goes by the name Jay Y. Lee in the West, had sur­vived the pros­e­cu­tor’s first at­tempt to ar­rest him last month, when a court in Seoul ruled that there was not enough ev­i­dence of bribery. But in­ves­ti­ga­tors have since col­lected what they called more in­crim­i­nat­ing ev­i­dence and again asked the court for an ar­rest war­rant. “Given the newly pre­sented crim­i­nal charges and the ad­di­tional ev­i­dence col­lected, the le­gal grounds and need for ar­rest­ing him are rec­og­nized,” the judge, Han Jeong-seok, said to­day, is­su­ing the ar­rest war­rant. Lee, who has yet to be con­victed of any crime, was the most prom­i­nent busi­ness­man to be en­snared in the spe­cial pros­e­cu­tor’s broad­en­ing in­ves­ti­ga­tion into a cor­rup­tion scan­dal that led to Park Geun-hye’s im­peach­ment by par­lia­ment Dec. 9. Park’s pres­i­den­tial pow­ers re­mained sus­pended, with the Con­sti­tu­tional Court ex­pected to rule in com­ing weeks whether she should be re­in­stated or for­mally re­moved from of­fice.


Re­porters ques­tioned Lee Jae-yong, the head of Sam­sung, upon his ar­rival for a hear­ing at Seoul Cen­tral Dis­trict Court on Thurs­day. The South Korean court is­sued an ar­rest war­rant early to­day for the Sam­sung heir, ac­cused of of­fer­ing bribes to a close friend of the coun­try’s pres­i­dent, Park Geun-hye.

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