South Korea’s independent counsel is seeking an arrest warrant for Jay Y. Lee, Samsung’s Vice Chairman and heir apparent, for handing over around 43 billion won (almost $48 million CAD) to President Park Geun-Hye’s confidant Choi Soon-Sil in exchange for business favors and perjury for having denied the allegation during parliamentary testimony held in December of last year.
Prosecutors say Lee was involved in a bribery scheme with his friend Choi Soon-Sil, who allegedly received funds for herself and her family, along with donations for two foundations she controls, says a new report from the New York Times.
Choi did not have an official position or any security clearance but is believed to have been secretly advising the president on a number of matters. Prosecutors believe the alleged bribes were in exchange for Choi convincing Park to support an $8 billion merger between Samsung and Cheil Industries.
The 48-year-old Lee, who became the de facto head of the Samsung Group after his father, Lee Kun-hee, was also accused of embezzlement and perjury, according to the prosecution’s application for an arrest 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,” special prosecution spokesman Lee Kyu-chul told a media briefing.
Samsung Electronics was founded by Lee’s grandfather. The younger Lee has been serving as its de facto head since his father suffered a heart attack in 2014. Samsung has repeatedly been accused of being a ‘fast follower’, copying Apple’s iPhone designs.
In 2013, The Independent published a story titled Tax evasion, bribery and price-fixing: How Samsung became the giant that ate Korea, which shed light on the power of ‘chaebols’, like Samsung:
The big daddy of the chaebols is the Samsung Group which, riding high on the success of its iPhone and iPad rivals the Galaxy and the Galaxy Note, has a turnover almost twice that of its closest rival, LG. The company’s clout is apparent in the drive from the airport west of Seoul into the capital, where a dense grey lattice of concrete and glass stretches across the Han river. Samsung’s apartments and buildings dot the landscape; Samsung Town dominates the business district. The company runs the Samsung Everland Theme Park, one of the world’s biggest, the Samsung Museum of Art and many other cultural attractions. Millions of citizens own Samsung’s smartphones and electronic products.
So important is Samsung to South Korea’s economy that it has literally become too big to fail. Its subsidiaries build a large share of the country’s infrastructure, from bridges to apartment blocks. The company accounts for 13 per cent of the country’s entire exports and a fifth of its GDP, according to analysts.
If prosecutors have their way, this could set a huge precedent in the country.