{"id":22398,"date":"2017-02-17T06:59:42","date_gmt":"2017-02-17T06:59:42","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=22398"},"modified":"2017-02-17T07:00:13","modified_gmt":"2017-02-17T07:00:13","slug":"samsung-chief-lee-arrested-south-korean-corruption-probe-deepens","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/samsung-chief-lee-arrested-south-korean-corruption-probe-deepens.html","title":{"rendered":"Samsung Chief Lee Arrested as South Korean Corruption Probe Deepens"},"content":{"rendered":"

\n\tSamsung Chief Lee Arrested as South Korean Corruption Probe Deepens<\/span><\/span><\/strong><\/span>
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\n\tSamsung Chief Lee Arrested as South Korean Corruption Probe Deepens:-<\/strong> Samsung Group chief Jay Y. Lee was arrested early on Friday over his alleged role in a corruption scandal rocking the highest levels of power in South Korea, dealing a fresh blow to the world's biggest maker of smartphones and memory chips.<\/span><\/span><\/span>\n<\/p>\n

\n\tThe 48-year-old Lee, scion of the country's richest family, was taken into custody at the Seoul Detention Centre after waiting there overnight for the decision. He was being held in a single cell with a TV and desk, a jail official said.<\/span><\/span><\/span>\n<\/p>\n

\n\tLee is a suspect in the influence-peddling scandal that led parliament to impeach President Park Geun-hye in December, a decision that if upheld by the Constitutional Court would make her the country's first democratically elected leader forced from office.<\/span><\/span><\/span>\n<\/p>\n

\n\tShares in flagship Samsung Electronics Co Ltd fell 1.1 percent, while shares in Samsung C&T Corp, the de facto holding company of Samsung Group, were down 2.8 percent compared with the wider market's drop of 0.2 percent.<\/span><\/span><\/span>\n<\/p>\n

\n\tContinue reading the main story
\n\tProsecutors have up to 10 days to indict Lee, Samsung's third-generation leader, although they can seek an extension. After indictment, a court would be required to make a ruling within three months.<\/span><\/span><\/span>\n<\/p>\n

\n\tNo decision had been made on whether Lee's arrest would be contested or whether bail would be sought, a spokeswoman for Samsung Group [SARG.UL] said.<\/span><\/span><\/span>\n<\/p>\n

\n\tSamsung and Lee have denied wrongdoing in the case.<\/span><\/span><\/span>\n<\/p>\n

\n\t"We will do our best to ensure that the truth is revealed in future court proceedings," the Samsung Group said in a brief statement after Lee's arrest.<\/span><\/span><\/span>\n<\/p>\n

\n\tThe same court had rejected a request last month to arrest Lee, but prosecutors on Tuesday brought additional accusations against Lee, seeking his arrest on bribery and other charges.<\/span><\/span><\/span>\n<\/p>\n

\n\t"We acknowledge the cause and necessity of the arrest," a judge said in his ruling.<\/span><\/span><\/span>\n<\/p>\n

\n\tThe judge rejected the prosecution's request to arrest Samsung Electronics president Park Sang-jin.<\/span><\/span><\/span>\n<\/p>\n

\n\tSENSITIVE TIME<\/span><\/span><\/span>\n<\/p>\n

\n\tWhile Lee's detention is not expected to hamper day-to-day operation of Samsung firms, which are run by professional managers, experts said it could hinder strategic decision-making at South Korea's biggest conglomerate, or chaebol.<\/span><\/span><\/span>\n<\/p>\n

\n\tSamsung has been in the midst of an ongoing restructuring to clear a succession path for Lee to assume control after his father was incapacitated by a heart attack in 2014.<\/span><\/span><\/span>\n<\/p>\n

\n\tDecisions that could be complicated by Lee's arrest include deliberations over whether to reorganize the group under a holding company structure, as well as its plan to abandon its future strategy office, a central decision-making body that came in for criticism during the scandal.<\/span><\/span><\/span>\n<\/p>\n

\n\tStaff moves have also been in limbo. Samsung, which employs around half a million people, has yet to announce annual personnel promotions and changes, which it typically does in December.<\/span><\/span><\/span>\n<\/p>\n

\n\tOne employee at Samsung Electronics’ chip division said colleagues were unsettled that prosecutors had singled-out Samsung.<\/span><\/span><\/span>\n<\/p>\n

\n\t"The mood is that people are worried," said the employee.<\/span><\/span><\/span>\n<\/p>\n

\n\tHowever, another Samsung Electronics employee described the situation as business as usual.<\/span><\/span><\/span>\n<\/p>\n

\n\t"It wouldn't make sense for a company of that size to not function properly just because the owner is away."<\/span><\/span><\/span>\n<\/p>\n

\n\tBoth declined to be identified, given the sensitivity of the matter.<\/span><\/span><\/span>\n<\/p>\n

\n\tLee's incarceration comes as Samsung Electronics tries to get past the disastrous rollout last year of its Galaxy Note 7 smartphones, which were prone to fires. It is under pressure for the upcoming launch of its next flagship phone, the Galaxy S8, to be a success.<\/span><\/span><\/span>\n<\/p>\n

\n\tMajor business groups criticized the decision, worried about the impact on Samsung.<\/span><\/span><\/span>\n<\/p>\n

\n\t"A management vacuum at Samsung, a global company representing the Republic of Korea, will increase uncertainty and undermine global confidence, posing a big burden on the already struggling economy," the Korea Employers Federation said.<\/span><\/span><\/span>\n<\/p>\n

\n\tZEROING-IN<\/span><\/span><\/span>\n<\/p>\n

\n\tLee's arrest gives a boost to prosecutors who have zeroed-in on Samsung Group to build their case against President Park and her close friend Choi Soon-sil, who is in detention and faces charges of abuse of power and attempted fraud.<\/span><\/span><\/span>\n<\/p>\n

\n\tBoth Park and Choi have denied wrongdoing.<\/span><\/span><\/span>\n<\/p>\n

\n\tProsecutors have focused on Samsung's relationship with Park, 65, accusing the group of paying bribes totaling 43 billion won ($37.74 million) to organizations linked to Choi to secure government backing for the controversial 2015 merger of two Samsung units, a deal that was seen as key to smoothing Lee's succession.<\/span><\/span><\/span>\n<\/p>\n

\n\tIf parliament's impeachment is upheld, an election would be held in two months. In the meantime, Park remains in office but stripped of her powers.<\/span><\/span><\/span>\n<\/p>\n

\n\tHer would-be successors praised the decision to arrest Lee.<\/span><\/span><\/span>\n<\/p>\n

\n\t"We hope it marks a beginning to end our society's evil practice of cozy ties between government and corporations and move toward a fair country," said Kim Kyoung-soo, a spokesman for Moon Jae-in, a member of the liberal opposition Democratic Party who is leading opinion polls in the presidential race.<\/span><\/span><\/span>\n<\/p>\n

\n\tSource:- https:\/\/www.nytimes.com\/reuters\/2017\/02\/17\/business\/17reuters-southkorea-politics-samsung-group.html?src=busln&mtrref=www.nytimes.com<\/span><\/span><\/span><\/p>\n

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