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Samsung Heir Arrested in South Korean Corruption Scandal

Image: Samsung Heir Arrested in South Korean Corruption Scandal

A protester carries a placard showing an image of Samsung heir Lee Jae-Yong during an anti-government protest in Seoul on Jan. 21, 2017. (Ed Jones/AFP/Getty Images)

By    |   Friday, 17 Feb 2017 02:10 PM

Samsung heir Lee Jae-young was arrested after prosecutor’s claim he was involved in a corruption scandal that led to the impeachment of South Korean President. Park Geun-hye.

The Seoul Central District Court approved a prosecutors’ request on Friday that called for the arrest of the 48-year-old de facto leader of Samsung, according to Market Watch.

Prosecutors have accused Jae-young of “bribery, embezzlement and perjury.” The scandal involves about $37 million that Samsung allegedly spent on entities linked to a friend of President Park Geun-hye’s while also enabling the company to receive political favors," MarketWatch said.

Samsung has denied the accusations.

The scandal ultimately led to Geun-hye’s impeachment. Geun-hye and her friend, Choi Soon-sil, have denied all wrongdoing in this case.

According to Sim Sang-jeung, an opposing lawmaker, Jae-young’s arrest is “just the beginning,” The New York Times noted.

“We needed to see whether prosecutors ask for a sentence befitting his crimes and whether he is convicted with such a penalty,” Sang-jeung said, according to the Times. “Only when he finishes serving such a lengthy sentence will people believe that the law is alive in their country.”

Samsung is significant to the South Korean economy.

“We are shocked and deeply worried,” the Korea Employers Federation said in a statement, according to the Times.

“Samsung is the global company that represents South Korea, and we fear that the vacuum in its management will weigh heavily on the economy by increasing uncertainty and hurt international credibility,” the statement continued.

“In the short term, it could have an impact on the stock, only because of sentiment, and also because the stock has risen a lot recently,” Jung Sang-jin, a fund manager at Korea Investment Management, said, according to Bloomberg.

“In the long-term, there won’t be much impact on the stock, given previous times when other chaebol heads were arrested with few problems for their companies to keep running the business,” Sang-jin added.

According to the court, prosecutors have 20 days to indict Jae-young.

Bloomberg said could take the court up to 18 months to get a verdict.

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Samsung heir Lee Jae-young was arrested after prosecutor's claim he was involved in a corruption scandal that led to the impeachment of South Korean President Park Geun-hye.
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Friday, 17 Feb 2017 02:10 PM
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