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Monday, January 16, 2017, 16:20

S.Korea prosecutors seek arrest of Samsung chief for bribery

By Agencies
S.Korea prosecutors seek arrest of Samsung chief for bribery
Lee Jae-yong, center, vice chairman of Samsung Electronics, leaves the office of the independent counsel in Seoul, South K orea, Jan 13, 2017. (Kim Do-hoon / Yonhap via AP)

SEOUL -- South Korea's special prosecutors' office said on Monday it was seeking a warrant to arrest the head of Samsung Group , the country's largest conglomerate,

for multiple charges including paying multi-million dollar bribes to a friend of President Park Geun-hye .

Lee was accused of paying bribes totalling US$36.42 million to Choi Soon-sil, a friend of the president who is at the centre of scandal

Samsung Group chief Jay Y. Lee was questioned for 22 straight hours last week as investigators probed a corruption scandal that resulted in parliament impeaching Park last month.

The special prosecutors' office accused Lee of paying bribes totalling 43 billion won (US$36.42 million) to Choi Soon-sil, a friend of the president who is at the centre of scandal.

Lee, who became the de facto head of the Samsung Group after his father, Lee Kun-hee, suffered a heart attack in 2014, was also accused of embezzlement and perjury in the prosecution's application for an arrest warrant.

Seoul's central district court said a hearing would be held at 10:30 am (0130 GMT) on Wednesday to decide whether to approve the warrant.

"The special prosecutors' office, in making this decision to seek an arrest warrant, determined that while the country's economic conditions are important, upholding justice takes precedence," Lee Kyu-chul, a spokesman for the office, told a media briefing.

Samsung said it could not accept the accusations that Lee paid bribes.

"It is difficult to understand the special prosecutors' decision," it said in an emailed statement.

The special prosecutors claimed that Park and Choi had shared private interests, which were significantly proven, saying there would be no problem in indicting the impeached leader for bribery charge.

Samsung made the biggest donations of 20.4 billion won among scores of conglomerates to two Choi-controlled foundations. It signed a 22-billion-won contract with a German company, owned by Choi and her daughter, while contributing 1.63 billion won to a winter sports center managed by Choi's niece.

In return for the financial assistance, Vice Chairman Lee is suspected of getting support from the national pension fund in the July 2015 merger between Samsung C&T and Cheil Industries to create a de-facto holding company.

The merger of two Samsung affiliates was extremely crucial to Lee to inherit the overall management control from his ailing father Chairman Lee Kun-hee who has been hospitalized for over two and a half years.

Vice Chairman Lee was also charged with giving a false testimony during the Dec 6 parliamentary hearing on the presidential scandal as he denied his involvement in the scandal.

In addition to the perjury charge, prosecutors requested the detention warrant for an embezzlement charge.

Three major Samsung executives, who were grilled before the Samsung heir's marathon interrogation last week, will be investigated without detention, the spokesman said.

The spokesman said other large businesses will also be subject to investigations on donations to the Choi-controlled foundations in return for getting favors.

NPS chairman Moon Hyung-pyo was indicted on Monday on charges of abuse of power and giving false testimony.

Park remains in office but has been stripped of her powers while the Constitutional Court decides whether to make her the country's first democratically elected leader to be forced from office.

Moon was arrested in December after acknowledging ordering the world's third-largest pension fund to support the US$8 billion merger in 2015 while he was head of the health ministry, which oversees the NPS.

Samsung has acknowledged providing funds to the three institutions but has repeatedly denied accusations of lobbying to push through the merger.

Choi is accused of colluding with Park to pressure big businesses, including Samsung, to contribute to non-profit foundations backing the president's initiatives.

Choi, in detention and on trial on charges of abuse of power and attempted fraud, again denied wrongdoing on Monday in an appearance at the Constitutional Court.

She also denied having any prior knowledge of the Samsung Group's controversial 2015 merger of two affiliates.

"Even if I knew, I could not have passed on any information because I have no knowledge about mergers or hedge funds, anything like that, in the first place," Choi told the court.

South Korea has been gripped by political crisis for months, with Park impeached in December. Park has also denied wrongdoing, though admitted carelessness in her relationship with Choi.

If the impeachment is upheld by the Constitutional Court, an election would be held in two months, with former UN Secretary General Ban Ki-moon expected to be a candidate.

Shares in group flagship Samsung Electronics, the world's top maker of smartphones, flatscreen TVs and memory chips, extended losses on Monday afternoon and were down 2.3 percent.

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