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(2nd LD) Special prosecutors to decide on Samsung heir's arrest by Sunday

All News 16:38 January 13, 2017

By Lee Haye-ah
(ATTN: UPDATES with probe team spokesman's remarks in paras 1-5, 9-10; CHANGES headline; EDITS to conform)

SEOUL, Jan. 13 (Yonhap) -- Special prosecutors investigating a corruption scandal involving President Park Geun-hye will decide by Sunday whether to arrest the de facto leader of Samsung Group on the suspicion of bribery, a spokesman said Friday.

Lee Jae-yong, vice chairman of Samsung Electronics Co., allegedly gave billions of won to various organizations linked to Park's confidante, Choi Soon-sil, in return for the government's backing of a controversial merger of two Samsung affiliates in July 2015. The group has acknowledged providing funds to the organizations but denied they were a bribe.

Lee was grilled by the special prosecutors for 22 hours until early Friday.

"It appears that a decision on Vice Chairman Lee's arrest will be made tomorrow or the day after tomorrow," Lee Kyu-chul, spokesman of the investigation team, said during a regular press briefing.

The charges under consideration include bribery, perjury and, depending on the source of the funds, embezzlement and breach of trust. Lee is accused of giving false testimony during a parliamentary hearing last month, during which he claimed to have "never" made donations expecting something in return.

Samsung signed a 22 billion won (US$18.3 million) consulting contract in August 2015 with a Germany-based firm owned by Choi and allegedly sent the company billions of won, which was used to fund her daughter's equestrian training, according to prosecutors.

The group also donated 20.4 billion won to the Mir and K-Sports organizations, which are linked to Choi, becoming the biggest contributor to the foundations set up to promote Korean culture abroad and support local sports.

Prosecutors claimed Samsung provided the money to Choi for exerting influence to get the National Pension Service to approve the merger a month earlier, a critical step for a smooth transfer of power to the heir apparent. Moon Hyung-pyo, chief of the National Pension Service and former health minister, was arrested last month over his alleged role in the merger deal.

"(The questioning) took a long time because there was a lot to investigate, and there were discrepancies in the answers required by the investigation team and the answers given by Lee on key issues," the spokesman said.

In deciding on Lee's arrest, the prosecutors' team will also decide whether to arrest other key executives of the conglomerate who have been implicated in the case.

Samsung Electronics Vice Chairman Lee Jae-yong leaves the special counsel team's office in southern Seoul on Jan. 13, 2017, after being questioned for 22 hours in connection with a corruption scandal. (Yonhap)

Earlier, an official close to the team said Lee told investigators his company was forced by the president to financially support Choi's businesses.

"Based on precedent, even if the bribe is given under pressure, the donor will be punished," the official said. "Lee's statement will only be a mitigating factor in the sentencing process."

Lee became a board member of Samsung Electronics last October and his father, Lee Kun-hee, has been hospitalized since suffering a heart attack in 2014.

Investigators are looking into whether Park was involved in the alleged deal. Should she be found guilty of bribe-taking, it would serve as a key argument to uphold her impeachment by parliament last month.

Park met with Lee privately on July 25, 2015, little over a week after the merger deal was concluded. She has maintained no pressure was exerted to make donations to Mir and K-Sports. She has also argued that the direction of the prosecution's probe is biased and investigators unfairly "tied her" to whatever Choi did without her knowledge.

According to Park, the two foundations were created with the best of intentions to benefit the country as a whole, and there was no intention to help any individual profit from the funds collected. Prosecutors have yet to confirm whether the money from Mir or K-Sports reached Choi, but they have hinted it would have occurred had the scandal not broken.

Park has said she will prove her innocence in the Constitutional Court, where a trial is underway to decide whether to uphold or overturn her impeachment.



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