South Korean authorities now seeking an arrest warrant for Samsung heir

Multiple outlets are reporting that South Korean authorities are seeking an arrest warrant for Lee Jae-yong, Samsung Electronics Ltd. vice chair and son of company head Lee Kun-hee.

The request is connected to a country-wide bribery scandal which has already resulted in the impeachment of South Korean president Park Geun-hye, and involves multiple allegations including bribery and embezzlement, none of which have been proven in court.

Samsung vice chair Jay Y. Lee has been accused of participating in government bribes that allegedly facilitated a company takeover in his interest.

Known professionally as Jay Y. Lee, the younger Lee has been accused of participating in payments that Samsung made to Choi Soon-sil, the presidential friend and advisor at the heart of Park’s impeachment scandal, in exchange for government support of a company merger that, according to the Korea Times, was designed for Lee to increase his stake in Samsung as a whole.

Lee has served as the company’s de facto head since his father suffered a heart attack in 2014.

According to Bloomberg and Reuters, after questioning Lee for 22 hours and considering his answers over the weekend, the independent team in charge of investigating the case decided to pursue the warrant, which still needs to be approved by a court that is expected to make a decision on Wednesday.

“We believe that there was an illegal request made by Samsung in facilitating the process of business succession,” Lee Kyu-chul, a spokesperson for the South Korean prosecutor’s office, said in a Jan. 16 media briefing, according to Bloomberg. The warrant would allow prosecutors to detain Lee while continuing their probe of Samsung, before ultimately filing formal charges. The total amount of bribes, including promised and embezzled funds, is alleged to be around 43 billion won (approximately $47.75 million Canadian), according to Bloomberg.

According to Reuters, the prosecutor’s office said it has evidence showing that Park and Choi shared profits made through bribery payments, but did not elaborate.

According to the Korea JoonAng Daily, Samsung pledged 22 billion won (approximately $24.39 million) to support the equestrian training of Choi’s daughter. It also contributed 1.6 billion won (approximately $1.77 million) to a winter sports training program established by Choi’s niece, and 20.4 billion won to a pair of Choi-affiliated nonprofit foundations.

It is suspected that in return for the funds, the South Korean president’s office facilitated last year’s merger of Samsung C&T (Samsung’s parent company, which oversees international sales operations) and Samsung affiliate Cheil Industries by ordering the country’s National Pension Service, which held shares in both companies, to vote for the deal, according to the Korea Times. According to JoonAng Daily, the National Pension Service also happened to be the largest shareholder of Samsung C&T – and the deal was criticized as unfair for Samsung C&T.

Lee is expected to appear at the Seoul central district court on Wednesday morning, when the court will decide whether to grant the arrest warrant.

In a Jan. 16 statement, Samsung denied providing Choi and her associates with financial aid in return for favours.

“We can’t accept the prosecutor’s argument that we made illegal requests associated with the merger and management succession,” the company said in a statement, according to Bloomberg. “We believe the court will make a wise decision.”

Reached for comment, a Samsung Canada representative told ITBusiness.ca that the tech giant’s Canadian division was not able to comment on an ongoing legal matter.

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Jim Love, Chief Content Officer, IT World Canada

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Eric Emin Wood
Eric Emin Wood
Former editor of ITBusiness.ca turned consultant with public relations firm Porter Novelli. When not writing for the tech industry enjoys photography, movies, travelling, the Oxford comma, and will talk your ear off about animation if you give him an opening.

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