You are here: Home » International » News » Companies
Business Standard

Samsung heir Lee Jae-Yong arrested in corruption probe

Lee Jae-Yong is accused of paying nearly $40 million in bribes

AFP/PTI  |  Seoul 

Samsung President Jay Y Lee confirmed that Korea's largest conglomerate provided a one-billion won horse used for equestrian lessons by Choi Soon-sil's daughter. Photo: Reuters
Lee Jae-Yong . Photo: Reuters

Prosecutors on Friday arrested the de facto head of South Korea's largest conglomerate, Samsung, on bribery and other charges related to a political corruption scandal that triggered the impeachment of President Park Geun-Hye.

In a fresh blow to the electronics giant's corporate image, a district court cited new evidence in approving the warrant against vice-chairman Lee Jae-Yong, who oversees the family-run electronics giant in the absence of his ailing father.

Among other allegations, Lee is accused of paying nearly $40 million in bribes to a confidante of President Park's to secure policy favours.

"It is acknowledged that it is necessary to (Lee Jae-Yong) in light of a newly added criminal charge and new evidence," a court spokesman said in a statement.

offered a measured response following the as the company's shares took a hit, dipping by around 1.5 per cent in morning trade.

"We will do our best to ensure that the truth is revealed in future court proceedings," the company said in a statement.

Lee was already being held at a detention centre after appearing in court on Thursday as judges deliberated whether to issue an arrest warrant. He will remain in custody as he awaits a trial likely to begin within a few months.

Lee, the son of the group boss Lee Kun-Hee, has been quizzed several times over his alleged role in the scandal that has rocked the nation.

The 48-year-old, described as a key suspect in the scandal, narrowly avoided being formally arrested last month, after the court ruled there was insufficient evidence.

But prosecutors on Tuesday made a second bid, saying they had collected more evidence in recent weeks. His arrest, the first for a chief, will send shock waves through the group, which is a major part of the South Korean economy and includes the world's largest smartphone maker,

"This is a blow to Samsung's image as a global player in the short term", HMC Investment Securities' analyst Greg Roh told AFP.

IBK Investment Securities' Lee Seung-Woo said that given the cloud over Lee, at a time when the firm is attempting a complicated restructuring, Samsung could refrain from pursuing long-term investments such as overseas mergers and acquisitions.

The company is already reeling from the debacle over the recall of its flagship Galaxy Note 7 device and reports have suggested it could face sanctions from overseas authorities if Lee is punished.

Lee's father and grandfather repeatedly had close brushes with the law but were never jailed.

First Published: Fri, February 17 2017. 13:40 IST