Published: Fri, February 17, 2017
Markets | By Lucia Cruz

Samsung heir Lee Jae-yong arrested in bribery probe

Samsung heir Lee Jae-yong arrested in bribery probe

South Korean prosecutors are attempting for a second time to arrest Samsung's de facto leader, who faces bribery allegations in connection with a massive political scandal.

Lee and the Samsung have denied doing anything wrong and President Park was already bribed when they got there.

Lee had been under investigation regarding alleged corruption charges involving impeached South Korean president Park Geun-hye.

After the prosecutor's first attempt to arrest Lee was rejected by a court on January 19 due to lack of evidence, the billionaire heir was called in again for 15 hours of questioning on Monday as investigators sought more information.

But prosecutors on Tuesday made a second bid for his arrest, saying they had collected more evidence in recent weeks.

Samsung watchers have said Lee's arrest would not affect the day-to-day running of group companies including Samsung Electronics Co Ltd, which are run by professional managers, but a prolonged absence could impact longer-term and strategic decision making.

The detention of Lee came at a time when Samsung is trying to limit the damage done by the global recall of the Galaxy Note 7 over safety concerns.

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Samsung is one of the biggest consumer products companies in the world.

On Wednesday, Samsung Group repeated an earlier denial on its official Twitter account: "Samsung has absolutely never bribed the president seeking something in return or sought illicit favours".

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

However, Lee's defense team reportedly maintained that Samsung gave donations under pressure from the president with no benefits attached.

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

Lee Jae-yong took over the Samsung conglomerate in October 2016, after his father, Lee Kun-hee, suffered a heart attack in May 2014, which still keeps him hospitalised and unable to communicate. It is also accused of separately giving millions of euros to Choi to bankroll her daughter's equestrian training in Germany.

Prosecutors accuse Lee in his capacity as the head of South Korea's largest conglomerate of pledging 43 billion won ($37.7 million) to a business and organisations backed by Choi in exchange for support of a 2015 merger of two Samsung companies. Samsung narrowly secured shareholder approval, thanks in part to support from the National Pension Fund, its key investor.

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