You are using an older browser version. Please use a supported version for the best MSN experience.

Prosecutor accuses Samsung’s heir apparent Lee of conspiring to hide bribes

LiveMint logoLiveMint 06-03-2017 Sam Kim

Seoul: South Korea’s special prosecutor accused Jay Y. Lee and other Samsung Group executives of conspiring to create fake documents to mask millions of dollars in bribes funnelled to a confidante of the nation’s president.

Lee, the de facto head of Samsung, is alleged to have committed perjury when he said he didn’t know his company had paid money to entities controlled by Choi Soon-sil, and that he wasn’t asked by President Park Geun-hye to provide financial support. The accusations were released on Monday by Park Young-soo, the prosecutor spearheading an investigation that’s reached the highest levels of business and government. Samsung and Lee have denied any wrongdoing.

The prosecutor indicted 30 people in an investigation into corruption surrounding the president, a probe that’s led to her impeachment and the detention of Lee, the country’s most prominent business leader. It’s spurred millions to take to the streets in protest over cosy ties between the government and the family-run chaebol.

Putting the heir to a $238 billion empire behind bars is the biggest accomplishment yet for Park Young-soo, whose career includes arresting two other chaebol bosses.

In its report on Monday, the special prosecutor’s team accused Lee and four other executives of conspiring to pay Choi a bribe of 7.8 billion won ($6.7 million) for purchasing and taking care of a horse for her daughter’s training in Germany, between September 2015 and February 2016.

They allegedly worked together to make it seem the money was used to support the overseas training of a Samsung-run equestrian squad that didn’t exist, the prosecutor said. And the executives created a fake contract to pretend that money promised to Choi would be paid to a paper company that Samsung Electronics Co. and Choi together created to receive the bribe, the prosecuting team said.

The smartphone maker was a victim of the embezzlement, the prosecutor said.

Park, the prosecutor, is scheduled to personally outline details of Lee’s indictment for the first time during a media briefing later on Monday.

Employees responsible for accounting at Samsung affiliates worked with Lee and two other indicted executives and took part in embezzling 22 billion won from the companies and paying it to Choi’s entities, the prosecutor said.

Jay Y. Lee has been in detention since his arrest last month, with his predicament casting uncertainty over his succession. The conglomerate’s transition to a younger leader after patriarch Lee Kun-hee’s hospitalization in 2014 was already marred by last year’s botched debut of the Note 7, a smartphone pulled from shelves because of a tendency to burst into flame. It also hampers the group’s ability to make major decisions, from acquisitions to management changes. The next test for Samsung Electronics without Lee will be the debut of the S8, its flagship smartphone model, due in late March.

The younger Lee has been indicted on five charges, including bribery, embezzlement, hiding assets overseas, perjury and hiding criminal profits. He is accused of directing tens of millions of dollars to entities controlled by Choi in return for government support of a 2015 merger that cemented his control of the group.

Although a typical trial and verdict could take up to 18 months, the special-prosecutor law recommends resolving the case much sooner.

A constitutional court is expected to rule on the validity of Park Geun-hye’s impeachment as soon as this month. If the court upholds parliament’s 9 December decision, she will lose her presidential immunity to indictment and a special election to replace her will take place within 60 days. Park Geun-hye and Choi have both denied wrongdoing. Bloomberg

More From LiveMint

image beaconimage beaconimage beacon