Samsung leader questioned as Korean probe widens

A South Korean special prosecutor’s office will question Samsung Electronics leader Jay Y. Lee as a suspect in a widening influence-peddling scandal that may force the country’s president, Park Geun-hye from office.
Samsung leader questioned as Korean probe widens

Prosecutors have been looking into whether Samsung payments of about 30 billion won (€23.5m) for a business and foundations backed by Ms Park’s friend, Choi Soon-sil, were connected to a 2015 decision by the national pension fund to back a controversial merger of two group affiliates.

Ms Park could become South Korea’s first democratically elected leader to leave office early after parliament voted in December to impeach her over the corruption scandal, which has triggered big weekly rallies calling for her to step down.

The impeachment must be upheld or overturned by the constitutional court. A spokesman for prosecutors said the Samsung leader had been summoned for questioning over suspicions including bribery.

The spokesman declined to comment on whether Jay Y. Lee or other Samsung executives will be indicted but would not rule out the possibility of the prosecution seeking an arrest warrant against Mr Lee.

A Samsung spokeswoman declined to comment.

Proving quid-pro-quo dealings between the Choi-linked organisations and Samsung are critical to prosecution efforts to bolster its case against president Park and show that she, or a surrogate, collected bribes in exchange for favours, analysts said.

For Samsung and its founding Lee family, an indictment or conviction of Jay Y. Lee would deal a blow to efforts to secure a stable transfer of control to heirs from ailing patriarch Lee Kun-hee.

The conglomerate has undergone major restructuring since 2014 to streamline its ownership structure and consolidate power under Jay Y. Lee and his two sisters.

Park Ju-gun, head of corporate analysis firm CEO Score, said while professional managers at affiliates such as Samsung would be able to keep the companies operating smoothly in the absence of Jay Y. Lee, key initiatives such as acquisitions and investments into new businesses would inevitably be slowed should the 48-year-old be imprisoned.

“I think Samsung Group is facing a bigger crisis than even the death of chairman Lee Kun-hee,” he said, referring to billions of dollars in inheritance taxes the Lee family heirs will be forced to pay when their father dies.

Shares in Samsung units did not move sharply on the news Jay Y. Lee was named a suspect, as investors anticipated the possibility he could be formally indicted.

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