Samsung vice-chairman Lee Jae-Yong (also known as Jay Y. Lee) has been arrested today over a corruption scandal that goes all the way up to South Korea’s president Park Geun Hye.
Reuters reported that Lee, 48, was in custody at the Seoul Detention Centre, as prosecutors attempted once again seek an arrest warrant over bribery allegations, having failed to gain one last month. Seoul Central District Court approved his arrest this time because of fears Lee may destroy evidence or flee.
Lee is accused of bribery, perjury and embezzlement, over payments that Samsung made to a close friend of South Korean president Park Geun-hye in exchange for government support in the company’s succession planning.
While Lee is Samsung’s current vice chairman, he is essentially de facto head of the company given his father, chairman Lee Kun-hee, has been hospitalised since 2014 after suffering a heart attack. Lee’s grandfather originally founded the world’s biggest smartphone manufacturer.
A request for an arrest warrant for Samsung Electronics president Park Sang Jin was rejected by the court.
State prosecutors allege they have evidence that Lee directed bribes to Choi Soon-sil, a close friend of South Korean president Park, who is suspended from office ahead of impeachment proceedings.
Choi, 60, currently on trial over charges of coercion and attempted fraud, denies any wrongdoing. She stands accused of colluding with Park to pressure companies, including Samsung, to donate to the president’s charities.
Authorities allege Samsung gave Choi a horse for her 20-year-old daughter, Chung Yu-ra, as well as riding lessons. The horse, Vitana V, is worth an estimated $1.07 million.
South Korea issued an arrest warrant for Chung in December for obstruction of justice after she refused to return from Germany to appear before a parliamentary inquiry. She was arrested on January 1 this year in Denmark.
In 2015, Reuters reported that Samsung paid $US18 million to a consulting firm owned by Choi, which in turn offered an equestrian team an $8 million sponsorship. Chung is a member of the team.
The tech giant is accused of giving millions to charities set up by Choi. The alleged bribery involved is estimated to be worth 800 billion won ($1.1 million).
Prosecutors also allege that Samsung sought political favours in the controversial 2015 merger of its de facto holding company Cheil Industries Inc with Samsung C&T Corp, its construction arm.
The merger went ahead despite significant shareholder opposition.
Business Insider Emails & Alerts
Site highlights each day to your inbox.