South Korea’s independent counsel is seeking an arrest warrant for Jay Y. Lee, Vice Chairman of Samsung Electronics Co., for handing over around 43 billion won ($36 million) to President Park Geun-hye’s confidant Choi Soon-sil in exchange for business favors and perjury for having denied the allegation during parliamentary testimony held in December last year.

The decision to request a court warrant to arrest Lee came three days after the 22-hour-long probe last week. Lee becomes the first corporate head to face arrest warrant in the case over influence-peddling scandal involving the president and her inner circle that has led to legislative impeachment motion against the president.

The independent counsel has clamped down on top conglomerates that confessed they have been strong-armed to make donations to foundations created by Choi while denying favors in return to build bribery case on Choi as well as the president, a finding that could be decisive in the Constitutional Court deliberation of the legitimacy of the legislative impeachment against Park. The bribery probe is expected to expand to Lotte and SK Group that also made handsome donations to Choi.

There had been concerns about physical detention of the head of the country’s largest business group that generates more than 300 trillion won ($253 billion) in annual sales amid heated global competition and impact on the local economy already fraught with poor business and consumer sentiment.

But the special investigation team decided to place principle ahead.

Lee, the de facto leader of the Korea’s largest conglomerate Samsung Group on behalf of his bedridden father, is accused of contributing funds to Choi with future benefit in mind. The prosecution concluded that Samsung Electronics struck a 22 billion worth consulting contract with Core Sports owned by Choi in Germany, donated 1.628 billion won to Korea Winter Sports Elite Center led by Choi’s niece and made 20.4 billion won worth contributions to Choi’s Mi-R and K-Sports Foundations. It suspects the president in return used her power to pressure National Pension Service (NPS) to back the merger between Samsung C&T and Cheil Industries in 2015. The merger was pivotal for Lee to gain legitimate control over the group.

Lee also faced charges of embezzlement for misappropriating company funds to finance the contributions to Choi. He is charged of perjury for denying bribery saying he didn’t know Choi when the company had decided on the charity funds, and claiming he had not expected any favors in return for donations.

Samsung Electronics shares finished Monday 2.1 percent lower at 1,833,000 won.

By Lee Hyun-jung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]