Samsung Heir And Vice Chairman Jay Y. Lee Faces Arrest In Political Bribery Scandal

As if Samsung needed another controversy to deal with, special prosecutors in South Korea have called for the arrest of Jay Y. Lee (Lee Jae-yong), the de facto head of the company who serves as vice chairman and who is set to inherit the firm, on allegations of bribery, embezzlement, and perjury. The heir apparent  is accused of offering millions of dollars to a longtime friend of President Park in return for the president's support of a merger that took place in 2015.

Prosecutors say Lee was involved in a bribery scheme with his friend Choi Soon-sil, who allegedly received funds for her and her family, along with donations to two foundations she controls. Choi did not have an official position or any security clearance but is believed to have been secretly advising the president on a number of matters. Prosecutors believe the alleged bribes were in exchange for Choi convincing Park to support an $8 billion merger between Samsung C&T and Cheil Industries.

Samsung

Samsung outright denied the allegations in a statement issued on Monday.

"The independent counsel’s decision is hard to understand. We never made donations in return for anything. We particularly disagree with the independent counsel’s argument that we sought illicit favors related to the merger and ownership transfer. We believe the court will make a proper judgment," Samsung said.

Prosecutors also plan to go after Park for allegedly receiving bribes as well. In total, prosecutors claim Lee paid out 43 billion won ($36.4 million) in bribes using Samsung's money. Since the money is considered corporate funds of Samsung Electronics and Cheil Worldwide, Lee gets the added charge of embezzlement.

"Profit sharing between the president and Chois was proven through various records," the independent counsel said. "We obtained objective physical evidence to prove their conspiracy."

Lee is also accused of perjury for a hearing in December related to the scandal. At the time, he testified that he did not know who Choi was and that Samsung did not make any donations in return for favors. However, the independent counsel says Lee both knew Choi and knew of her influence over the president when Samsung decided to chair the Korean Equestrian Association in March 2015. Choi's daughter is an equestrian athlete, with Samsung her financial patron.

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