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The Korea Herald
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THE INVESTOR
March 29, 2024

The Boardroom

Prosecutors request arrest warrant against Samsung heir

  • PUBLISHED :February 14, 2017 - 14:54
  • UPDATED :February 14, 2017 - 18:49
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[THE INVESTORThe special counsel team probing the latest bribery scandal involving President Park Geun-hye and her confidante Choi Soon-sil requested a Seoul court to issue an arrest warrant against Samsung Vice Chairman Lee Jae-yong for bribery charges.

Lee has been accused of having ordered his aides to give a combined 43 billion won (US$37 million) to shady businesses and organizations run by Choi in return for favors in the pending leadership transfer at the nation’s largest conglomerate.

The prosecutors also asked the court to detain one of Lee's top aides Park Sang-jin, who is deemed to have played a key role in providng financial support for Choi.

The court is slated to hold a reviewing session of the arrest request for Lee and Park of Samsung on Feb. 17. 


Ahn Hoon/The Investor



The vice chairman, who serves as the de facto leader of the conglomerate on behalf of his bedridden father Lee Kun-hee, was summoned by the special investigation team at 9:30 a.m. on Feb. 13.

After being quizzed for nearly 15 hours on Feb. 13 by the prosecutors for his alleged involvement in the bribery scandal, the Samsung Electronics vice chairman went right back to office after midnight to discuss with his top aides how to respond to an arrest warrant likely to be sought for him this week.

The latest questioning session, which came after the previous one on Jan. 12, ended at 1 a.m. on Feb. 14.

The prosecutors questioned him for 22 hours in the first questioning.

Asked by reporters after the questioning on Feb. 14 if he requested Choi for any political favors in solving the conglomerate’s cross-shareholding structure and talked about the power succession at the conglomerate with President Park, he headed off to his office without answering.

An official from the investigation team said that Lee “repeated the same statements as last time,” indicating the de facto Samsung leader denied the allegations against him.

Exerting unusual influence over government agencies and state-run organizations, Choi had allegedly helped Samsung complete a controversial merger of two subsidiaries -- Samsung C&T and Cheil Industries -- in 2015 that would raise Lee’s stake in Samsung Electronics, the group’s crown jewel, and further strengthen his control across Samsung affiliates.

Choi allegedly pressured the nation’s antitrust watchdog Fair Trade Commission to give the conglomerate favors in the sale process of C&T shares held by Samsung SDI, a battery business arm of the conglomerate, in 2015.

Overturning its initial decision to require SDI to sell 10 million shares in C&T to solve the conglomerate’s contentious cross-shareholding structure, the FTC allowed the battery firm to sell half of the shares, presumably, aimed at cushioning the impact of the stake sale for Samsung.

Samsung is also suspected of having received favors from President Park and her confidante in proceeding with the initial public offering of its drug business arm Samsung Biologics in November last year.

Korea Exchange, the nation’s securities exchange operator, allegedly bent its rules to allow the contract drug manufacturer, which at the time suffered an operating loss for the third consecutive year, to be listed on the stock market.

Before the change of the stock exchange regulations which came a year before the drug manufacturer went public, only those companies that earned an average of 70 billion won in revenue and 6 billion won in operating profit for the previous three years were allowed to list their shares on the stock market.

“The listing of Samsung BioLogics' shares on the Korean stock market was a result of the efforts to pave the path for companies with high potentials to grow in Korea, not in foreign markets,” said Kim Seong-tae, an official from Korea Exchange.

The prosecutors are expected to seek an arrest warrant for Lee within this week once again after their failed attempt to detain the business tycoon. Last month, a Seoul court turned down the investigation team’s request for Lee’s arrest due to a lack of evidence.

By Kim Young-won (wone0102@heraldcorp.com)

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