South Korean special prosecutors have charged the Samsung Electronics Vice Chairman with bribery and embezzlement
South Korea’s special prosecutor’s office has confirmed that it will indict Samsung heir-apparent Lee Jae-yong on multiple charges, including bribery, embezzlement and perjury. Four other company executives have also been indicted on similar charges, as the South Korean courts take the first formal steps towards prosecution in the high-profile corruption probe. Following the prosecutor’s announcement, three of the indicted executives stepped down from their positions at Samsung.
Lee was formally arrested on February 17, as part of a corruption investigation surrounding the now-impeached President Park Geun-hye. The Samsung Electronics Vice Chairman is accused of providing up to $36m to a top political aide and close friend of the President, Choi Soon-sil.
In return for these substantial donations to Choi’s overseas non-profit foundations, the political crony allegedly ensured state approval for a major restructuring initiative at Samsung, which saw the technology giant merge two of its units. This 2015 merger bolstered Lee’s plans to consolidate his control over the sprawling conglomerate, smoothing an eventual transition of power from his father, current Samsung Chairman Lee Kun-hee.
The arrests come as President Park awaits a Constitutional Court ruling on whether to uphold her December impeachment
In the wake of the indictments, Samsung has confirmed that it will be dismantling its controversial Future Strategy Office, a key unit responsible for overseeing major initiatives at the firm, such as new investments and partnerships. The corporate strategic office served as the company’s top policy-making body, enabling the founding Lee family to wield unparalleled influence over the conglomerate. The office dealt closely with government affairs, and has come under scrutiny as a potential hub for influence peddling and lobbying efforts.
The arrests come as President Park awaits a Constitutional Court ruling on whether to uphold her December impeachment, with the result expected within the next month. Park’s impeachment was triggered by accusations of political interference by the President’s confidante, who has since been jailed. According to prosecutors, Choi profoundly influenced government affairs during Park’s administration, by forcing South Korea’s largest conglomerates, known as chaoebols, into giving tens of million dollars in donations in exchange for political influence. While several of the nation’s biggest businesses are implicated in the scheme, Samsung has emerged as the single largest donor to Choi’s various foundations.
As the corruption probe deepens, Samsung’s Lee continues to deny any wrongdoing. If he is found guilty by the South Korean courts, however, the Samsung heir could face up to 20 years in prison.