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South Korea political probe: Samsung leader named a suspect



South Korea political probe: Samsung leader named a suspect

South Korea political probe: Samsung leader named a suspect

A South Korean special prosecutor’s office will question Samsung Group [SAGR.UL] leader Jay Y. Lee as a suspect in connection with a peddling scandal that led to a parliamentary vote to impeach President Park Geun-hye. Prosecutors have been investigating whether Samsung payments of about 30 billion won ($25 million) for a business and foundations backed by Park’s friend, Choi Soon-sil, were connected to a decision by the national pension service to back a controversial merger of two group affiliates in 2015.

A spokesman for the special prosecution team, Lee Kyu-chul, told a briefing that Lee had been summoned for questioning at 9:30 a.m. (0030 GMT) on Thursday, over suspicions including bribery, but did not elaborate further on the subject.

When asked if the prosecution team would request an arrest warrant for Lee, the spokesman replied, “All possibilities are open,” Samsung declined to comment.

In December, National Pension Service chief Moon Hyung-pyo was arrested after acknowledging that he was responsible for putting pressure on the fund to approve the merger between Samsung C&T Corp and Cheil Industries Inc in 2015, while he was health minister.

The Samsung leader denied bribery accusations during a parliamentary hearing in December, and rejected lawmakers’ assertions that that Samsung lobbied to get the fund to vote in favor of the merger.

“The special prosecutor needs Samsung to establish a potential bribery charge against President Park Geun-hye,” said Shin Yul, a political science professor at Myongji University.

In reference to the firm’s sponsorship of Choi’s daughter’s equestrian career, Shin added, “Samsung is the one that has made the biggest contributions among conglomerates and it had an exclusive relationship with Choi Soon-sil, buying a horse,” This month, the daughter, Chung Yoo-ra, was arrested in Denmark after being sought by South Korean authorities.

Following the news, shares in Samsung units did not move too much, since some investors had anticipated the possibility of Lee being formally indicted. Shares of Samsung Electronics ended up 2.8 percent, edging lower after trading at a record 1.928 million.

The shares could see a correction because of heightened uncertainties, but the stock will see support from strong earnings prospects, said HDC Asset Management fund manager Park Jung-hoon.

Park said that shares of firms such as Samsung C&T Corp (028260.KS) that are more closely linked with potential succession-related restructuring may lose strength, because formal prosecution of Lee could delay the process.


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