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S Korea corruption: Prosecutors to seek arrest warrant

Lee Jae-yong Image copyright Getty Images
Image caption Lee Jae-yong has been running the Samsung group since his father became seriously ill

South Korea's special prosecutor is seeking an arrest warrant for Samsung heir apparent Lee Jae-yong, accused of bribery, embezzlement and perjury.

The case is linked to a scandal that led to the impeachment of the country's President Park Geung-hye.

Samsung is accused of giving donations to non-profit foundations operated by Choi Soon-sil, a friend of Ms Park, in exchange for government favours.

The firm said the issuing of the arrest warrant was "hard to understand".

Seoul Central District Court must now decide whether to go ahead and issue the warrant.

If this happened, Mr Lee would be the first executive to be arrested in connection to the scandal.

He is currently vice-chairman of Samsung Electronics, but since his father, Lee Kun-hee, suffered a heart attack in 2014, he is considered de facto boss of the entire Samsung Group conglomerate.

'Justice takes precedence'

Mr Lee, also known as Jay Y Lee, was questioned as a suspect for more than 20 hours at the prosecutor's office in Seoul last week.

Charges the department wants to bring include:

  • Bribery: approving decisions to pay Ms Choi in a bid to win political influence
  • Embezzlement: spending corporate funds on bribes
  • Perjury: telling a parliamentary hearing that he made donations without seeking any preferential treatment

Lee Jae-yong

Samsung's heir apparent

  • - Grandson of Samsung founder Lee Byung-chul, son of current chairman Lee Kun-hee.

  • - Also known as Jay Y Lee, the 48-year-old has spent his entire career in the company.

  • - Is vice chairman of Samsung Electronics and was nominated to join the firm's board in October 2016.

  • - Despite his arrest, still widely expected to take overall control of Samsung.

  • - Critics say his rise through Samsung has been due to his birth, not his business experience.

Getty Images

Samsung is South Korea's most high-profile company, and its sales are equal to about a fifth of the country's GDP.

A spokesman for the special prosecutor's office acknowledged the arrest of Mr Lee could be damaging for the firm, but added "while the country's economic conditions are important, upholding justice takes precedence".

Regret

The claims against Samsung centre on a controversial merger between the electronics giant's construction arm, Samsung C&T, and an affiliate firm, Cheil Industries.

Prosecutors allege that Samsung gave money to a company co-owned by Ms Choi and her daughter, in return for Ms Park's support for the deal.

Earlier on Monday the special prosecutor indicted the country's National Pension Service (NPS) chairman Moon Hyung-pyo on charges of abuse of power and giving false testimony.

The NPS is the world's third-largest pension scheme and was a major shareholder in the two Samsung Group affiliates. It is claimed Mr Moon pressured the organisation to back the deal - something the NPS has denied.

At the parliamentary hearing in December, Samsung admitted giving a total of 20.4bn won (£16m; $17.46m) to the two foundations, but denied seeking favours.

During that hearing, Mr Lee also said the firm had made separate payments to help fund Ms Choi's daughter's equestrian career, including buying an $850,000 horse - something the Samsung executive says he regrets.

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