S Korea prosecutor seeks arrest warrant for Samsung scion

SEOUL — Prosecutors are seeking a warrant of arrest for Samsung Group’s Jay Y Lee for allegations including bribery and embezzlement, a stunning turn for the scion of South Korea’s richest family groomed for decades to take over the company from his father.

Mr Lee, 48, the de facto head of the Samsung Group and vice-chairman of Samsung Electronics, is accused of participating in payments that Samsung made to a close friend of South Korean President Park Geun-hye in exchange for government support in the company’s succession planning.

A court will still have to determine whether to approve the warrant, which was announced by prosecutors in a briefing yesterday. A hearing is scheduled for tomorrow.

A special prosecution team was established last month to investigate whether Samsung and other chaebol business groups contributed money to Choi Soon-sil, President Park’s confidant, in exchange for political favours. President Park has already been impeached, and her powers suspended.

“We believe that there was an illegal request made by Samsung in facilitating the process of business succession,” Mr Lee Kyu-chul, a spokesman for the prosecutor’s office, said in the briefing.

The arrest warrant would let prosecutors continue their probe while Mr Lee is detained. Formal charges and an indictment would follow. The total amount of bribes, including promised funds and money embezzled, is alleged to be about 43 billion won (S$52 million), Mr Lee Kyu-chul said.

Samsung denied that the company provided financial aid in return for any favours.

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

The investigation jeopardises Mr Jay Y Lee’s ability to take over Samsung Group, and risks further destabilising the leadership of South Korea’s largest company. His father, chairman Lee Kun-hee, has been hospitalised since suffering a heart attack in 2014.

“If Lee is imprisoned, it will damage Samsung’s reputation as well as South Korea’s economy in general,” said Professor Park Sang-in of Seoul National University.

“Samsung represents the country’s economy.”

Prosecutors will continue to investigate three other Samsung executives, including Samsung corporate strategy office vice-chairman Choi Gee-sung, president Chang Choong-ki, and Samsung Electronics president Park Sang-jin, without any arrests. BLOOMBERG