Samsung chief Jay Y.Lee arrested on bribery charges

Samsung Group's chief Jay Y.Lee arrested on allegations of bribery to the South Korean President.

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Highlights

    • Samsung VC arrested on allegation of bribery to the South Korean president.
    • The trial and verdict to extend up to 18 months.
    • Company claims no affect on the business.

Samsung’s vice chairman has been charged for attempting to bribe the president of South Korea, Park Geun-hye. The Samsung Group’s chief Jay Y.Lee was officially arrested on allegations of bribery, perjury and embezzlement according to a Bloomberg report.

The Seoul Central District Court approved a warrant to arrest Lee early on Friday. The warrant was issued after a request from the special prosecutor’s office tabled early this week providing additional evidence. The prosecutors claimed that Lee had paid 43 billion won ($38 million) in exchange for the government’s support around the merger of two of Samsung’s Group holding companies. According to Bloomberg report, the vice chairman had been charged for funding the South Korean President’s associates as he tried to ‘consolidate’ control over the expansive conglomerate. The court however rejected the request initially to arrest Lee in January this year.

Park was being held for impeachment as part of the scandal in December last year. Both Lee and Park rejected the allegations previously, and Lee said that he never gave any donations in exchange for the government’s preferential treatment.

Lee became the de-facto chief of the world’s largest smartphone maker in 2014 after his father, the company’s former chairman was hospitailsed due to a heart attack. According to Bloomberg report, the trial and verdict are expected to last up to 18 months.

As Samsung is prepping for the next big release of the highly-anticipated flagship Galaxy S8 this new development might have an impact on the company’s image. The Galaxy Note 7 debacle had already marred the company’s reputation and a major revenue of the South-Korean smartphone manufacturer. Samsung in a statement (via Bloomberg) said, “We will do our best to ensure that the truth is revealed in future court proceedings.” “In the short term, it could have an impact on the company’s stock, only because of sentiment, and also because the stock has risen a lot recently,” said Jung Sang-jin, a fund manager at Korea Investment Management told the report.