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(LEAD) Arrest warrant sought for Samsung heir in corruption probe

All News 15:05 January 16, 2017

(ATTN: COMBINES with article slugged pension fund chief-indictment; UPDATES with probe team's briefing, photo)

SEOUL, Jan. 16 (Yonhap) -- Special prosecutors on Monday requested an arrest warrant for Lee Jae-yong, Samsung Group's de facto leader, on charges of bribery, embezzlement and perjury in connection with an influence-peddling scandal that led to President Park Geun-hye's impeachment.

Lee, vice chairman of Samsung Electronics Co., is accused of giving some 43 billion won (US$36.3 million) worth of bribes to Park's jailed friend Choi Soon-sil in return for the state-run pension fund's backing of a merger of two Samsung affiliates, the team's spokesman Lee Kyu-chul told a regular press briefing.

Samsung signed a 22 billion won (US$18.3 million) consulting contract in August 2015 with a Germany-based firm owned by the woman who is at the center of the scandal and allegedly sent the company billions of won, which was used to fund her daughter's equestrian training, according to prosecutors. The money that was originally promised to be handed over was included in the amount deemed as bribes, Lee, the spokesman, said.

Some 20.4 billion won the group donated to two nonprofit foundations, allegedly linked to Choi, was also viewed as a kickback. It was the largest amount given by any business group to the organizations.

Prosecutors suspect Samsung supported Choi in return for the National Pension Service (NPS) approving the contested merger of two Samsung subsidiaries on July 17, 2015.

The Samsung scion has denied most of the allegations raised during a parliamentary hearing held last month.

"In seeking the warrant, the investigation team concluded that establishing justice was more important than the possible impact it (the arrest) could have on the national economy," the spokesman said.

The team decided to carry out the investigation on three other senior Samsung executives, including a vice chairman Choi Gee-sung, without detention.

Moon Hyung-pyo, chief of the NPS and former health minister, was indicted on the same day on charges of abuse of power, becoming the first suspect to be indicted by the investigation team.

Moon, who served as the health minister from December 2013 to August 2015, is suspected of pressuring the pension fund while he was the minister in 2015. He was formally arrested last month.

The spokesman earlier said Moon has admitted to the allegations during the interrogation, reversing his statements made during a parliamentary hearing. He was also charged with perjury.

Investigators are looking into whether President Park was involved in the process which they deem a bribery case. Park met with Lee Jae-yong privately on July 25, 2015.

The business group has admitted to making contributions to the two foundations and her firm, but denied such contributions were related to the merger.

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.

The Seoul Central District Court will hold a hearing on Wednesday to review the legality of detaining the Samsung business chief.

Lee Jae-yong, vice chairman of Samsung Electronics Co., leaves the special prosecutor's office in Seoul on Jan. 13, 2017, after 22 hours of questioning over allegations Samsung Group offered financial aid to President Park Geun-hye's longtime friend Choi Soon-sil, the woman at the center of a massive corruption scandal, in return for business favors. (Yonhap)


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