South Korea prosecutors accuse Samsung chief of bribery, seek arrest

By Ju-min Park and Se Young Lee

SEOUL (Reuters) - South Korea's special prosecutor's office said on Monday it was seeking a warrant to arrest the head of Samsung Group, the country's largest conglomerate, accusing him of paying multi-million dollar bribes to a friend of President Park Geun-hye.

Samsung Group chief Jay Y. Lee was questioned for 22 straight hours last week as investigators probed a corruption scandal that resulted in parliament impeaching Park last month.

The special prosecutor's office accused Lee of paying bribes totalling 43 billion won ($36.42 million) Choi Soon-sil, a friend of the president who is the woman at the centre of scandal.

Lee was also accused of embezzlement and perjury in the prosecution's application for an arrest warrant.

Seoul's central district court said a hearing will be held at 10:30 a.m. (0130 GMT) on Wednesday to decide whether to approve the warrant. Samsung did not have an immediate comment.

"The special prosecutor's office, in making this decision to seek an arrest warrant, determined that while the country's economic conditions are important, upholding justice takes precedence," Lee Kyu-chul, a spokesman for the office, told a media briefing.

Prosecutors have been looking into whether Samsung's support for a business and foundations backed by Park's friend Choi 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 Monday on charges of abuse of power and giving false testimony.

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.

Choi, in detention and on trial on charges of abuse of power and attempted fraud, again denied wrongdoing on Monday in an appearance at the Constitutional Court.

She also denied having any prior knowledge of the Samsung Group's controversial 2015 merger of two affiliates.

"Even if I knew, I could not have passed on any information because I have no knowledge about mergers or hedge funds, anything like that, in the first place," Choi told the court.

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.

Shares in group flagship Samsung Electronics, the world's top maker of smartphones, flatscreen TVs and memory chips, extended losses on Monday afternoon and were down 2.3 percent.

(Additional reporting by Christine Kim and Joyce Lee; Writing by Nick Macfie and Tony Munroe; Editing by Simon Cameron-Moore)