Court denies a request to arrest Samsung's de facto head

2017-01-19 13:48
 Lee Jae-yong. (File, AP)

Lee Jae-yong. (File, AP)

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Seoul - A Seoul court on Thursday denied a request to arrest one of South Korea's most powerful men, the heir to the Samsung Electronics juggernaut, in a setback to prosecutors investigating an influence-peddling scandal that toppled South Korea's president.

The Seoul Central District Court said that a judge concluded that there was not enough justification to detain the 48-year-old billionaire Samsung vice chairman, Lee Jae-yong, at this stage.

The announcement, made around 05:00 local time, allowed Lee to return home after a long night. He had been waiting for the court's decision at a detention center south of Seoul for more than 12 hours after a court hearing the previous day.

Samsung said "the merits of this case can now be determined without the need for detention."

The decision means that Samsung avoids what could have been a stunning fall for the princeling of the country's richest family, a man groomed to lead South Korea's most successful company.

Economic dominance

It came amid calls for caution from some business groups and newspapers worried that arresting Lee could hurt the economy because of Samsung's huge role, both economically and psychologically, in the country.

It is not uncommon in South Korea for courts to issue an arrest warrant past midnight for important or contentious cases, said Shin Jae-hwan, a spokesperson for the Seoul court. The long deliberation means the judge must have agonised over the decision, he added.

Prosecutors said Lee gave 43 billion won ($36 million) in bribes to President Park Geun-hye and Choi Soon-sil, her confidante, seeking support for a contentious merger. They also suspect him of embezzling and lying under oath during a parliamentary hearing last month.

The court's decision may hurt prosecutors' plan to expand the bribery probe to Park.

Prosecutors expressed strong disappointment and said they believe the court's decision was caused by a difference in legal views on the nature of the allegations against the Samsung heir.

Samsung and other companies told investigators that they felt forced to make donations to foundations controlled by Choi in fear of retaliatory tax investigations and other unfair government treatment, according to state prosecutors who handed over the investigation to special prosecutors.

"The court's rejection of the arrest warrant is very regrettable," Lee Kyu-chul, a spokesperson for a special prosecutors' team investigating the political scandal, said. "We'll take measures to continue an investigation unwaveringly," he said, without elaborating.

South Korea's main opposition party, which spearheaded Park's impeachment, accused the court of being too lenient. "The president was impeached and Choi Soon-sil was arrested ... but Samsung is still fine," the Democratic Party said in a statement.

Lee has been serving as the de facto head of Samsung since his father suffered a heart attack in 2014. Shortly after the recalls of the Galaxy Note 7 smartphone last year, he joined the board of Samsung Electronics, the group's crown jewel.

Conglomerates like Samsung, known as chaebol, dominate South Korea's economy, jobs and investment. Samsung Electronics and its affiliated companies account for about a third of the market value in South Korea's main stock market.

Civic groups had called for Lee's arrest as a way to show that all are equal before the law.

South Korean Royality

Many were infuriated by the allegations that the government had pressured a pension fund, a major investor in Samsung, to help the Lee family's succession plan. Moon Hyung-pyo, the former health minister was indicted on Monday for allegedly pressuring pension fund officials to support the merger.

Prosecutors said Moon, who now heads the pension fund, acted on behalf of President Park, who ordered him to make sure that the Samsung merger went smoothly. They plan to summon Park to question her about the bribery allegations.

Park has been suspended from her duties since the parliament impeached her in December. She is awaiting the Constitutional Court's decision on whether her impeachment will be upheld. Choi is on trial for meddling in state affairs.

Educated in South Korea, Japan and the United States, Lee is the crown prince of the country's richest family, one South Koreans often liken to royalty.

His father is South Korea's richest individual whose net worth is estimated at $14.8 billion by Forbes Magazine. The younger Lee's net worth is estimated at $5.8 billion.

The elder Lee was convicted twice on bribery, embezzlement and other charges in 1996 and 2008, but he was never imprisoned. He received suspended jail terms and was later pardoned by the country's presidents both times.

Read more on:    samsung  |  park geun-hye  |  south korea

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