Samsung Heir Named Suspect in Presidential Corruption Scandal

Samsung Heir Named Suspect in Presidential Corruption Scandal
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Samsung’s Vice Chairman and heir apparent Jae-yong Lee has been formally named a suspect by special prosecutors in a wide-ranging and historic corruption scandal that has rocked South Korean politics.

After weeks of massive rallies that brought millions of protesters to the streets of Seoul, President Park Geun-hye has been impeached by parliament and faces ouster over revelations that her close confidante Choi Soon-sil used their relationship to enrich herself and lead a lavish lifestyle. President Park continues to deny wrongdoing, though she has apologized for carelessness.

The widening corruption probe has even embroiled South Korea’s chaebols, a powerful group of sprawling, family-owned conglomerates that count household names such as Samsung, LG, and Hyundai among their ranks. Last December, patriarchs and heads of major chaebols, who tend to studiously avoid the limelight, were hauled before parliament for a grueling eight hours of nationally televised questioning regarding their ties and financial favors to Choi Soon-sil.

Tomorrow, Jae-yong Lee will be questioned by prosecutors who seek to determine whether Samsung’s payments of $25 million to businesses and foundations backed by Choi Soon-sil were part of a political quid pro quo. In 2015, South Korea’s national pension fund approved a controversial merger between two Samsung Group companies, which paves the way for Jae-yong Lee to take over South Korea’s largest conglomerate. The salient question is whether President Park personally pressured the national pension fund to support the merger in exchange for Samsung’s financial support of Choi’s organizations.

“Special prosecutors are mainly after President Park, but in this case, to charge Park with bribery, they have to prove her connection with Samsung,” Chung Sun-sup, who runs, said to Bloomberg. “Prosecutors used to overlook the chaebols’ wrongdoings in the past, but this scandal is different because citizens can no longer tolerate the cozy relationship between politics and business.”

If Jae-yong Lee is indicted or convicted, it will throw a wrench in years of careful planning for him to take his father’s place at Samsung’s helm. On the other hand, Samsung shares rose 2.8% on Wednesday when it reported its highest operating profit in three years despite the fiery demise of the Galaxy Note 7, proving its resilience to investors.

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