South Korea seeks Warrant to Arrest Samsung Boss over Bribery

Jay Y. Lee of Samgsung Electronics Co. Ltd., at the annual Allen and Co. Media and Technology Conference, Saturday, July 15, 2006 in Sun Valley, Idaho. Photographer: Matthew Staver/Bloomberg News.

South Korea special prosecutor is seeking a warrant to arrest Samsung chief Jay Y. Lee in relation to bribery.

The case stems from a recent political scandal and impeachment of South Korean President, Park Guen-hye.  According to the prosecutor’s office, Lee gave $36.42m in bribes to organisations linked to President Park’s friend, Choi Soon-sil in order to gain permission to merge two affiliates and gain control of the family business.

Lee Kyu-chul, spokesman for the prosecutor’s office, said, “The special prosecutors’ office, in making this decision to seek an arrest warrant, determined that while the country’s economic conditions are important, upholding justice takes precedence.”

He went on to say that the office had evidence that Choi and Lee shared the profits made through the payments.

It is believed prosecutor Lee will appear before the Seoul central district court which will make the final decision on whether to grant the office a warrant to arrest the Samsung boss.

Samsung Deny Wrongdoing

In a statement Samsung have said, “It is difficult to understand the special prosecutors’ decision.”  It rejected the bribery accusations, stating, “It is especially hard to accept the special prosecutor’s assertion that there was improper request for a favor related to the merger or succession of control.”

The investigation centres on Samsung’s support for a company and foundations backed by Choi, are linked to the $8bn merging of Samsung C&T Corp and Cheil Industries Inc.

Samsung has acknowledged providing the funds to the Choi backed entities.

Abuse of Power

Moon Hyung-pyo, National Pension Service’s Chairman, was arrested on Monday for giving false testimony and abuse of power.  He approved the merger of the two companies that have given Samsung boss Lee control.

According to the prosecutor office, Park via her aids ordered Moon to ensure the merger deal went ahead.

President Park is currently awaiting a decision on whether her impeachment will be upheld.  She denies wrongdoing.

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