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Prosecutors look to arrest Samsung heir

By Agence France-presse in Seoul | China Daily | Updated: 2017-01-17 08:20

South Korean prosecutors on Monday sought the arrest of the heir to the Samsung empire over a scandal that has seen the country's president impeached, in the latest setback for the conglomerate.

Samsung, the world's largest smartphone maker, is already reeling from the international debacle over its Galaxy Note 7, which was recalled after some devices caught fire.

Prosecutors investigating the corruption scandal said they asked a court to issue an arrest warrant for Lee Jae-yong, the only son of Samsung group chairman Lee Kun-hee.

The Seoul Central District Court said it would rule on the request on Wednesday.

Prosecutors look to arrest Samsung heir

The scion is vice-chairman of Samsung Electronics, the firm's flagship subsidiary, and the de facto head of the group after his father suffered a heart attack in 2014.

If prosecuted and convicted he could face a maximum five years in prison, but leading South Korean businessmen have previously been given suspended terms for such offenses - including the elder Lee.

The announcement sent the share price of Samsung Electronics - South Korea's largest listed firm by value - falling 2.14 percent, shaving more than $5 billion off its market capitalization.

"This is a big crisis for us," Yonhap news agency quoted an unnamed senior Samsung executive as saying. "We have to make aggressive investment and merger and acquisition decisions to race ahead of competitors.

"But we are afraid that the latest development could cause great delays in our decision-making process."

The political scandal centers on President Park Geun-hye's confidante Choi Soon-sil.

Choi is accused of using her ties with the president to coerce top local firms into "donating" nearly $70 million to dubious nonprofit foundations which Choi then used as her personal ATMs, in exchange for political favors.

Lee, 48, is accused of bribery and embezzlement for approving decisions to pay Choi 43 billion won ($36.4 million), and of perjury at a parliamentary hearing.

Prosecutors are probing whether Samsung's payments were aimed at securing government approval for a 2015 merger of two of its units, Cheil Industries and Samsung C&T.

(China Daily 01/17/2017 page12)

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