February 17, 2017 9:57 am JST

Samsung heir arrested over bribery allegations

Court approves warrant for Lee Jae-yong, citing new evidence

KIM JAEWON, Nikkei staff writer

Samsung Electronics Vice Chairman Lee Jae-yong (center) © Reuters

SEOUL -- Samsung Electronics Vice Chairman Lee Jae-yong was arrested and held at a detention center Friday morning on suspicion that the electronics maker's de facto leader gave 43 billion won ($37.5 million) to a friend of South Korean President Park Geun-hye to help smooth his succession at the company.

The Seoul Central District Court approved the arrest warrant for Lee, acknowledging new evidence that the 48-year-old Samsung heir bribed the woman, Choi Soon-sil, to gain support from the National Pension Service for the merger of its two key affiliates in 2015. The state pension fund voted for the merger of Samsung C&T and Cheil Industries, helping Lee consolidate his control over C&T, which owns a 4.25% stake in Samsung Electronics.

The court gave the green light to special prosecutors four weeks after it rejected the first warrant for Lee, citing a lack of evidence. "I acknowledge the reasons and the necessity of arresting Lee Jae-yong based on new criminal allegations and supporting evidence," said Han Jeong-seok, a judge at the court.

Special prosecutors reportedly collected the new evidence against Lee by raiding the nation's antitrust agency. Investigators suspect President Park pressured the Fair Trade Commission to favor Samsung.

The judge denied an arrest warrant for Park Sang-jin, a president at Samsung Electronics, saying the executive had merely followed orders from Lee. Park was released from the detention center around 7 a.m. local time.

Lee was put in a 6.56-square-meter cell at the detention center, equipped with a foldable mattress, a television, a desk and a bookshelf. He was staying in the cell pending a summons from the special prosecutors and subsequent court hearings.

Samsung issued a short statement saying the company will do its best to ensure that the truth is revealed in court.

Analysts say three Samsung executives -- Vice Chairman Kwon Oh-hyun, President Yoon Boo-keun and President Shin Jong-kyun -- may lead the company. All three are on the company's board of directors.

Kwon, 64, is the head of Samsung's semiconductor business. Yoon, also 64, is in charge of consumer electronics. The 61-year-old Shin heads the mobile business.

Observers say Lee's arrest will help prosecutors speed up their investigation of President Park, who was impeached by South Korea's parliament in December over an influence-peddling scandal. Her case is pending at the Constitutional Court, which is expected to rule next month.

Asia300

Samsung Electronics Co., Ltd.

South Korea

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