Seoul: Won, stocks slip on Samsung Group leader's arrest

Employees walk past logos of Samsung Group at its headquarters in Seoul

As part of South Korea's crusade against corruption, Jay Y. Lee the Group chief of Samsung was arrested in connection to a scandal involving many powerful government officials in the country.

"The rationale for and the necessity of (Lee's) arrest is acknowledged considering the new charges and additional evidence collected", the court said according to Yonhap.

The arrest of Lee came shortly after a court issued a warrant in the second attempt by the special counsel to arrest him.

The powerful vice chairman of the Samsung Group faced an hours-long wait in detention on Thursday as a court decided his fate in relation to the corruption scandal that has engulfed South Korea, local media said.

The merger of Samsung C&T and Cheil Industries was extremely crucial to the Samsung's third-generation leader to inherit the management control from his father Lee Kun-hee who was incapacitated in 2014 for heart attack. "But without questioning president Park, I still doubt if the court can accept the arrest warrant this time".

Numerous allegations in the case revolve around the Lee family's suspected efforts to keep control of the corporate behemoth. 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 centre operated by her niece.

Samsung said in a statement Wednesday it had "not paid bribes nor made improper requests to the president seeking favours".

His arrest may lead to a leadership vacuum in the company, which may also, in turn, adversely affect the South Korean economy.

The investigators are examining whether this contract was signed as a quid pro quo for the state-run pension fund's backing of a major 2015 merger deal between Samsung subsidiaries.

Despite this and the massive recall of its Galaxy 7 smartphone, which stemmed from a critical battery problem, Samsung Electronics shares are up by 60% over the past year.

If the court confirms Park's impeachment, the next presidential election would have to take place within 60 days. Beyond the legal charges, she is being blamed for both effectively bringing down the government of President Park and leaving her reputation and political legacy in tatters.

Related:

Comments


Other news