(Samsung Electronics Vice Chairman Lee Jae-yong. Photo: Korea Times)
The Special Prosecutor in South Korea requested an arrest warrant for Samsung’s de-facto leader Lee Jae-yong. Lee was questioned by an independent council team as a bribery suspect Thursday (Yonhap). Currently, Lee is the Vice Chairman of Samsung Electronics, but is the only son of the incapacitated Samsung Chairman Lee Kun-hee.
During the scandal, Samsung was at the center of a few shady deals. In August of 2015, the conglomerate signed a 22 billion won contract with a German company owned by a person in the midst of the scandal. A few months later, in October of the same year, Samsung made a 20.4 billion won donation to two foundations set up by Choi Soon-sil; in 2016, Samsung became the biggest local contributor to those foundations (Yonhap). In return for such moves, the Blue House supposedly pressured the National Pension Service to support the merger of Samsung C&T and Cheil Industries, a decision for which the NPS held the deciding vote (Korea Times). The warrant was sought by the prosecutor on the grounds that such donations were bribes to gain political favors (NY Times).
The request for a warrant was pushed back until Monday since the Special Prosecutor wanted to weight the economic implications of Lee’s arrest (CNBC). As one of South Korea’s largest conglomerates, some economic impact is certainly possible. Samsung, however, may face more challenges internally. The arrest will open a power vacuum within the company, making it difficult for Samsung to push through its reconstruction and merger and acquisitions campaigns (Korea Herald).
An arrest warrant against Lee casts more speculation against the president in the face of an already damning political scandal which has rocked the nation and resulted in the impeachment of Park Geun-hye on December 9 by the National Assembly.