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Asia Today ISSN 1861-4604 Monday, April 23, 2018

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South Korea’s corruption scandal explodes: Samsung heir indicted on bribery charges

Lee has been effectively running Samsung

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SEOUL, South Korea - Jay Y. Lee, heir to the Samsung empire, and four other top company executives were indicted today on multiple charges including bribery and embezzlement.> BNN

Forty eight-year old Lee has been effectively running Samsung since his father was hospitalized almost three years ago.

He was arrested on February 17 for his alleged involvement in the corruption scandal that led to the impeachment of President Park Geun-hye.

"We apologize for the social controversy and distress we have caused," Samsung Group Executive Vice President Lee June told reporters.

The influence-peddling scandal that has taken centre stage in the country over the last few months is now reaching its climax - the special prosecutors’ investigation ended on Tuesday and the Constitutional Court is expected to decide by mid-March whether to uphold the impeachment of President Park.

Lee Kyu-chul, a spokesman for the special prosecutor has said, “Samsung was directly linked to the influence-peddling scandal and was essential to the special prosecutor’s investigation. The indictment describes in detail the private conversation between Jay Y. Lee and President Park Geun-hye.”

The tech giant is accused of paying on the order of the Samsung chief, some $36 million in bribes, to Park's close confidante Choi Soon-sil in exchange for the government’s support for a merger of two Samsung affiliates in 2015.

Choi, according to reports, used her influence with Park and the government to extract money from major South Korean businesses to win favorable treatment for the concerned companies.

Samsung did not comment on Tuesday’s indictment. 

Company spokeswoman Rhee So-eui instead repeated statements that Samsung “has not paid bribes nor made improper requests to the president seeking favors” and that the company will “do our best to ensure that the truth is revealed in future court proceedings.”

Earlier, the Seoul Central District Court approved the prosecutors’ request to detain Lee on multiple allegations including bribery. 

Prosecutors additionally accused Lee of hiding assets abroad and concealing profit gained from criminal acts. 

A Samsung spokesperson had noted that this marked the first time a top-ranking executive at the company had been imprisoned since 1938.

Following the high-profile arrest, shares of Samsung Electronics fell 1.7 percent in Seoul, while the broader market slipped 0.2 percent.

Soon after the indictment was announced, Samsung unveiled sweeping changes, announcing it would close its Corporate Strategy Office, a unit coordinating the various arms of the huge conglomerate, and that the vice chairman, president and all team managers would step down. 

In addition, Samsung said that Park Sang-jin, a president at the flagship Samsung Electronics, had also resigned.

The new development will prove to be a setback to the world’s largest phonemaker and the country’s largest conglomerate, even as the company is trying to recover from the massive recall of some 3 million Galaxy Note 7 smartphones due to fire incidents in 2016.

So far, the 105-member special prosecutor team has indicted 30 individuals as part of the probe.

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