Samsung heir Jay Lee arrested following bribery allegations

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

Advertisement

Lee’s arrest will cause an immediate void in the Samsung Group’s leadership, a awful scenario that the company has been bracing for a while. Its main company, Samsung Electronics, accounts for 20 percent of the country’s total exports.

“We will do our utmost to ensure the truth will be revealed in court”, Samsung Electronics said in a statement on Friday. He’s now awaiting trial at a detention center in Seoul. His grandfather and founder of Samsung Group Lee Byung-chul faced smuggling charges in 1966 but his son was jailed instead of him.

With the prosecution probe due to expire at the end of this month, now could be the last chance to secure the arrest of Lee. As of today, Lee is South Korea’s fourth-richest person with a net worth that FORBES estimates at $6 billion. The conglomerate’s transition to a new, younger leader was already marred by last year’s botched debut of the Note 7, a smartphone that was discontinued after it showed a tendency to catch fire and explode.

Mr Lee is in line to succeed his ailing father. Lee is accused of making improper payments to the nation’s president, Park Geun-Hye, and her associate Choi Soon-sil in a major scandal.

Samsung is one of the biggest consumer products companies in the world. It also transferred millions of euros to Choi’s company in Germany that financed equestrian training of her daughter and funded money to a winter sports center operated by her niece.

Samsung Electronics Vice Chairman Lee Jae-yong (C) enters a Seoul court for hearings in Seoul, South Korea, on February 16, 2017.

His father Lee Kun-hee, the second-generation chief, was convicted twice on bribery and tax evasion in 1996 and 2008, but he received suspended prison terms.

Prosecutors alleged that the bribes were paid to win favor from the country’s state pension fund in 2015, when Samsung merged two of its affiliates, a move seen as critical for Lee’s succession plan.

Advertisement

Shareholders had argued against the merger between Samsung’s de-facto holding company, Cheil Industries, and its construction arm, Samsung C&T, claiming that the deal would give Lee too much control and influence over the new entity. Samsung’s legal department and other related departments have been busy responding to the situation. Park ended up being impeached in December as part of this scandal.

Lee Jae-yong vice chairman of Samsung Electronics Co. enters the Seoul Central District Court in southern Seoul on Feb. 16 2017 to attend a hearing on the legitimacy of his arrest sought for the second time by special prosecutors for alleged bribery

Leave a Comment

CAPTCHA image
*