South Korean Prosecutors to Indict Samsung Heir on Bribery Charges
The world's leading smartphone maker will shut down a key strategy office, among other management restructuring plans, as four other company execs are to be indicted on similar charges.
Jay Y. Lee — aka Lee Jae-yong — the billionaire Samsung heir, will be formally indicted in connection with a wide-ranging scandal that resulted in the impeachment of South Korean President Park Geun-hye, South Korean prosecutors said on Tuesday.
Four other Samsung executives face similar charges. Prosecutors said the indictments would happen later in the day.
They have accused the 48-year-old vice chairman of Samsung Electronics with bribery, embezzlement, hiding of assets overseas and perjury. In particular, Lee allegedly gave some $40 million to Choi Soon-sil, a close aide of Park, who is at the center of the influence-peddling scandal.
Prosecutors say Lee has received political favors in return, such as the state-run pension fund's backing of a merger between Samsung affiliates — a move that is seen as critical in the succession plans for the heir, who has been de-facto head of the giant company in place of his ill father.
Lee was arrested earlier this month, marking the first time that the head of the country's largest family-run business, or chaebol, has been detained. Samsung is the world's biggest maker of smartphones, ahead of Apple, and its electronics arm alone accounts for one-fifth of South Korea's exports.
Shortly after the indictment plans for Lee were made public, Samsung announced a set of plans to revamp its management. It said it would shut down its future strategy office, which has come under criticism amid the scandal, as one of its main tasks is to deal with government affairs. Last week, Samsung Electronics also approved a new clause aiming to make donations more transparent.
Meanwhile, the special prosecution team investigating the political scandal has named President Park a bribery suspect. The special prosecution team, led by independent counsel Park Young-soo, alleges that the president colluded with Choi in extorting money from Samsung, its spokesman Lee Kyu-chul said Tuesday. This wraps up the team's three-month probe into the massive influence-peddling scandal that has greatly angered South Koreans, leading to weekly anti-president street protests.