Lee Jae-yong, Samsung Heir Arrested On Bribery And Corruption Charges

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Lee-Jae-yong

Lee Jae-yong, the heir of the Samsung Group, was arrested on charges of bribery, perjury and embezzlement, a move that threatens his rise to the top spot in the world’s largest smartphone maker. The Seoul Central Court issued the order early Friday; Could be up to 18 months before a verdict is given. The arrest was ordered because of the risk that Lee, 48, could destroy evidence or flee, a court spokesman said.

The investigators question whether Lee, a vice president of Samsung Electronics, participated in the delivery of up to 43 billion won ($38 million) to benefit a close friend of South Korean President Park Geun-hye in exchange for government support to consolidate Way that would allow him to control the conglomerate founded by his grandfather.

“We will do our best to disclose the truth,” Samsung said in a statement.

Shares of the firm fell above one percent in early trading in Seoul. Before detention, this year they had risen 5.5 percent after a rebound of 43 percent in 2016.

“In the short term, it could have an impact on sentiment stocks and also because they have increased a lot recently,” said Jung Sang-jin, fund manager at Korea Investment Management. “In the long term, there will not be much impact, given earlier cases when other cluster chiefs were arrested with few problems for their firms.”

The billionaire heir was called Monday on a 15-hour interrogation as investigators searched for more information. A spokesman for the special prosecutor said Tuesday that he found evidence that Lee was hiding profits made through criminal acts and hiding assets abroad.

However, the same court refused to arrest the chairman of the technology giant, Park San Jin, who also heads the Korean Federation of Hyica. The special prosecutor’s office had tabled requirements earlier this week for alleged bribery charges. All this, a month after the prosecution tried unsuccessfully to prosecute Jay and Lee.

(Source: Bloomberg)

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