After 22 hrs of questioning, prosecutors seek arrest of Samsung chief

SEOUL: South Korea's special prosecutors' office said it will seek a warrant to arrest the head of Samsung Group, the country's biggest conglomerate, as a corruption scandal engulfing President Park Geun-hye escalated on Monday (Jan 16).

Samsung Group chief Jay Y. Lee was questioned for 22 straight hours last week as investigators probe a scandal that has reached the highest levels of power in South Korea.

The arrest warrant must be approved by a court, an official at Seoul central district court said. The date of the hearing has still to be confirmed, but it is likely to be Wednesday, the official said. Samsung did not have an immediate comment.

Prosecutors have been looking into whether Samsung's support for a business and foundations backed by Park's friend, Choi Soon-sil, may have been connected to the National Pension Service's 2015 decision to support a controversial $8 billion merger of two Samsung Group affiliates.

NPS chairman Moon Hyung-pyo was indicted on charges of abuse of power and giving false testimony on Monday, while Choi appeared before the Constitutional Court, denying wrongdoing.

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 $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.



"NO ULTERIOR MOTIVES"

Choi, in detention and on trial on charges of abuse of power and attempted fraud, again denied wrongdoing on Monday.

She said she had access to a former presidential aide's email address which had Blue House (presidential office) documents, but that she only looked at Park's speeches for "emotional expression".

Choi described Park as "a person without ulterior motives" who "does not allow people to take private interest or take private interest herself".

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 U.N. Secretary General Ban Ki-moon expected to be a candidate.

Former opposition party leader Moon Jae-in maintained his lead in an opinion poll for presidential favourites, while Ban tightened the gap in second place, a Realmeter survey commissioned by the Maeil Business Newspaper showed on Monday.

The special prosecutors' office had said it would make a decision on Samsung's Lee on Sunday, but needed more time to deliberate all factors, including the potential economic impact.

The drama doesn't seem to have put off investors. South Korea rang in the new year with Asia's first sovereign bond, pricing the $1 billion, 10-year issue well below the initially indicated yield as global investors rushed to buy.



EQUESTRIAN CONNECTION

The special prosecution also questioned Park Sang-jin, a president at Samsung Electronics, for about 13 hours until early on Friday.

Park Sang-jin had signed a contract for Samsung Electronics in 2015 to sponsor an equestrian team, the main beneficiary of which was the daughter of President Park's friend Choi, a key figure in the scandal who is in detention and undergoing a criminal trial. Choi has denied wrongdoing.

Her daughter, 20-year-old Chung Yoo-ra, was arrested by Danish police early this month after she was sought by South Korean authorities. Chung, who won a gold medal in group dressage at the 2014 Asian Games, has denied wrongdoing.

Park Sang-jin, who had refused to appear at parliamentary hearings on the matter citing health issues, did not comment to reporters as he left the prosecutors' office at about 3 a.m. (1900 GMT Thursday) wearing a white face mask.

Two other Samsung Group executives were questioned by special prosecutors on Monday and released.

Samsung has acknowledged making payments to two foundations at the center of the scandal, as well as to a consulting firm controlled by Choi, but has repeatedly denied accusations of lobbying to push through the controversial 2015 merger of affiliates Samsung C&T Corp. and Cheil Industries Inc.
Dozens of South Korean corporate groups made contributions totaling 77.4 billion won ($65.75 million) to two foundations that were set up to back President Park's initiatives, but Samsung's donations were the largest.

Late last month, the head of South Korea's National Pension Service, the world's third-largest pension fund, was arrested after he acknowledged that he had pressured the fund to approve the $8 billion merger between the two Samsung Group affiliates while he was head of the health ministry, reversing an earlier public denial.Read more