South Korea Court Approves Arrest of Samsung Heir Jay Y. Lee

  • South Korea Court Approves Arrest of Samsung Heir Jay Y. Lee

South Korea Court Approves Arrest of Samsung Heir Jay Y. Lee

South Korea's special prosecutor's office said on Wednesday it had expanded charges against Samsung Group chief Jay Y. Lee to include hiding the proceeds of a criminal act before it chose to seek a warrant for his arrest.

The prosecutors argued that the 48-year-old billionaire offered a bribe of $36 million to President Park Geun-hye and her long-time friend to win government backing for a controversial merger.

Park was impeached by parliament in December over accusations that she colluded with a friend, Choi Soon-sil, to pressure big businesses to donate to two foundations set up to back the president's policy initiatives.

Seoul Central District Court's decision is likely to shock the business world.

Lee's impending arrest comes a day after he was questioned for eight hours by the same Seoul court that previously denied a similar warrant request, citing lack of evidence. It is also accused of separately giving millions of euros to Choi to bankroll her daughter's equestrian training in Germany.

The court said new criminal suspicion and additional evidence shows there are enough reasons to take Lee into custody.

Samsung is South Korea's largest business group and its revenue is equivalent to about a fifth of the country's GDP.

They are also seeking the arrest of the president of Samsung Electronics Co Ltd, Park Sang-jin, who also heads the Korea Equestrian Federation and attended Thursday's hearing with Lee.

South Korea's special prosecutor's office has expanded charges against Samsung boss Jay Lee to include hiding the proceeds of a criminal act.

This is the second attempt by prosecutors to arrest Lee, the heir to the Samsung Group.

Samsung said in a statement Wednesday it had "not paid bribes nor made improper requests to the president seeking favours".

Some group watchers dismissed that likelihood, noting that Lee Boo-jin does not have experience at the flagship Samsung Electronics or hold a significant stake in the company. Samsung narrowly secured shareholder approval, thanks in part to support from the National Pension Fund, its key investor.

The special prosecution office is also reportedly looking into whether the value of Samsung Biologics, which went public a year ago, was overpriced to benefit the Samsung founding family and also whether the fair trade commission gave any favors to Samsung in relation to its complex cross shareholding structure, which allows the Lee family to control the sprawling businesses with only a minority stake.

The merger was opposed by many minority shareholders, who said the deal would hurt them while unfairly benefiting Lee and other members of Samsung's founding family.

Park, who remains in the presidential Blue House, could become the first democratically elected leader in South Korea to be forced from office.