A South Korean court has approved an arrest warrant for Samsung’s heir Lee Jae-yong. This concerns the bribery and embezzlement charges against Lee, which also form part of a wider corruption scandal that has led to the impeachment of President Park Geun-hye in December.
The arrest order, which was issued by the Seoul Central District Court Feb. 17, is expected to send shockwaves not just through the Samsung conglomerate but also the South Korean business community. It appears that new evidences have surfaced, convincing the court that the warrant is justified.
Back in January, the court refused to grant Korean prosecutors’ request to take Lee into custody citing lack of evidence. The recent order, on the other hand, came on the heels of a seven-hour marathon hearing conducted closed-doors.
The arrest allows prosecutors to hold the Samsung vice chairman for as long 20 days. Lee, who has been holed in a detention center prior to the court decision, will be indicted after that. He has maintained his innocence.
In a brief statement, Samsung reiterated that the company’s daily operation will not be affected by the latest development and stressed that it will continue to defend itself against the charges.
“We will do our best to ensure that the truth is revealed in future court proceedings,” Samsung said.
Lee’s arrest has a curious backstory. He has been investigated for his ties with Choi Soon-sil, the president’s confidante and the primary person of interest in the corruption scandal. She is being labeled as the South Korean version of Rasputin for her influence over President Park.
Prosecutors allege that Lee donated $37.3 million to several organizations backed by Choi in exchange for her support for the merger of two Samsung companies, Samsung C&T and Cheil Industries. The merger, which is worth $8 billion, was eventually approved by the country’s National Pension Services
There is also claim that Lee sponsored the equestrian career of Choi’s daughter, which effectively dragged the name of two Samsung executives as possible suspects, as they also serve in the Korea Equestrian Federation.
When Lee was invited for questioning, analysts predicted that it would not impact Samsung’s market performance. The position will likely change after the release of the arrest order and the looming threat of indictment.
According to the Korea Herald, several chaebol executives have also been unnerved by the arrest order. A number has been suspected of the same practices that Lee has been charged with. Their concern is not surprising particularly after the team of special prosecutors overseeing the investigation is now seeking an extension to its term.
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