Wed, Mar 01, 2017 - Page 1 News List

Samsung closes office as chief faces bribery charge

Reuters, SEOUL

South Korean prosecutors yesterday said they plan to charge Samsung Group chief Jay Y. Lee with bribery and embezzlement as the top conglomerate announced the dismantling of its corporate strategy office, the latest developments in a scandal that has rocked the country for months.

Lee, 48, was arrested on Feb. 17 over his alleged role in the corruption scandal involving impeached South Korean President Park Geun-hye, dealing a fresh blow to the standard-bearer for Asia’s fourth-largest economy.

The special prosecutor’s office said on the last day of its investigation that it would charge Lee, third-generation leader of the tech giant chaebol, and four other executives with bribery and embezzlement.

It also said it would charge him with pledging bribes to a company and organizations tied to Park’s confidant, Choi Soon-sil, the woman at the center of the scandal, to cement his control of the smartphones-to-biopharmaceuticals business empire.

“We apologize for the social controversy and distress we have caused,” Samsung Group executive vice president Lee June said.

The announcement came ahead of a Constitutional Court ruling on whether to uphold parliament’s December last year’s impeachment of Park.

That impeachment was triggered by accusations that she colluded with Choi to pressure big businesses, including Samsung, to donate to two foundations set up to back the president’s policy initiatives.

Park, the 65-year-old daughter of a former military strongman has had her powers suspended. The Constitutional Court’s ruling is expected sometime this month.

Should it uphold the impeachment, Park would become the country’s first democratically elected president to be thrown out of office.

While a sitting president cannot be indicted, the special prosecutors nevertheless have classified her as a suspect.

They did not disclose specifics of the charges against Jay Y. Lee or other Samsung executives. Samsung Group, which has denied paying bribes to Park or seeking improper favors from her, declined to comment on the indictment.

Park, Choi and Lee have all denied wrongdoing. Based on the main charges levied against Jay Y. Lee, he could face up to 20 years in prison if convicted.

Jay Y. Lee in December last year promised to shut Samsung’s corporate strategy office, a key nerve centre responsible for major initiatives such as investment in new businesses, amid accusations by politicians that it was a key organ for illicit lobbying efforts.

With about 200 employees hand-picked from various affiliates, the office did not exist as a legal entity, but wielded enormous power as the instrument of control for the founding Lee family.

Samsung said the chief executives and boards of the affiliates such as Samsung Electronics and Samsung C&T Corp would set their own course going forward.

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