Samsung chief Jay Y. Lee arrested for part in South Korean corruption scandal

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The acting head of the Samsung Group, Jay Y. Lee, was arrested on Friday by police in South Korea, taken into custody hours after a warrant for his arrest was approved by the country's Central District Court.




Lee is now in the custody of the Seoul Detention Center, reports Reuters, after waiting overnight at the center for the court's decision. Despite belonging to the wealthiest family in the country, the 48-year-old Lee is apparently not getting special treatment while under arrest, with a jail official noting he is being held in a single cell with a TV and a desk.

It is unclear if Lee's arrest will be contested or if he will be bailed, as a spokeswoman for Samsung Group advised no decision had been made on the matter.

"We will do our best to ensure that the truth is revealed in future court proceedings," according to a statement from the group.

Prosecutors now have up to ten days to indict Lee, though this time can be extended via a request to the court, with an initial ruling on the matter required from the court within three months of the indictment. Prosecutors are said to be planning to continue questioning Lee on Saturday.
Lee has been accused of embezzlement, bribery, perjury, and hiding assets overseas.
Lee is implicated in a corruption scandal involving South Korea's leader, President Park Geun-hye, and close friend Choi Soon-sil. Samsung is accused of funneling $37.31 million into businesses and organizations Choi backs, to try and gain her support for the merger of two Samsung affiliates.

The prosecutor's office accuses Lee of embezzlement, bribery, perjury, and hiding assets overseas, for his part in the scandal. Company president Park Sang-jin has escaped arrest, after the court rejected a warrant request from the special prosecutor's office.

It is thought the arrest of the executive would cause some disruption for the Samsung Group as a whole, as Lee works as a stand-in leader following his father's heart attack in 2014, and as the vice chairman of Samsung Electronics. Samsung Group is slowly restructuring, clearing the path of succession for Lee from his father, but the arrest may cause complications in reorganizing the group and plans to eliminate the "future strategy office," the unit that came under criticism during the scandal's investigation.

The investigation has also caused a delay in staffing changes for the group's half a million employees. Announcements for annual personnel promotions and changes are typically made in December, with the executive issue making the announcement considerably late.

Day-to-day operations are unlikely to be affected by the arrest, with one Samsung Electronics employee claiming it to be business as usual for production. "It wouldn't make sense for a company of that size to not function properly just because the owner is away," the unnamed employee said.

Upcoming devices, such as the Galaxy S8, are likely to ship on schedule despite the arrest, with other supply deals likely to be treated the same way. Samsung is one of a number of component suppliers for Apple's devices, despite being fierce competitors in the mobile marketplace, and has reportedly signed a deal worth $4.3 billion to supply 5-inch OLED panels to Apple, possibly for use in the "iPhone X" or "iPhone 8."

Comments

  • Reply 1 of 13
    sog35sog35 Posts: 11,901member
    this is definitely an explosive story!
    magman1979watto_cobra
  • Reply 2 of 13
    macxpressmacxpress Posts: 2,527member
    This guy should be "fired" 

    Sorry, couldn't resist! :smiley: 
    magman1979watto_cobra
  • Reply 3 of 13
    I'm not an expert by any means, but from what I understand of Korean society there are several families that own many of the large companies like Samsung (and Korean Air) and wield a huge amount of power. The arrest of the head of one of these companies must be an incredible and shocking turn of events.
    watto_cobra
  • Reply 4 of 13
    sog35sog35 Posts: 11,901member
    macxpress said:
    This guy should be "fired" 

    Sorry, couldn't resist! :smiley: 
    LOL
    watto_cobra
  • Reply 5 of 13
    sog35sog35 Posts: 11,901member
    MplsP said:
    I'm not an expert by any means, but from what I understand of Korean society there are several families that own many of the large companies like Samsung (and Korean Air) and wield a huge amount of power. The arrest of the head of one of these companies must be an incredible and shocking turn of events.
    The real key is if he gets any jail time.

    The last Samsung CEO was a 2 time convicted felon, but served ZERO jail time...........cause the Korean President pardoned him 
    magman1979watto_cobra
  • Reply 6 of 13
    MplsP said:
    I'm not an expert by any means, but from what I understand of Korean society there are several families that own many of the large companies like Samsung (and Korean Air) and wield a huge amount of power. The arrest of the head of one of these companies must be an incredible and shocking turn of events.
    I'm actually quite surprised this is happening. Having spent a lot of time in Korea, it's just like you say. The large companies such as Samsung, Korean Air, Hyundai, etc are all well connected to the government. It will be interesting to see if anyone actually gets any jail time. 
    Soliwatto_cobra
  • Reply 7 of 13
    Here's the thing. While the design of S8 and the ad campaign are probably finalized, the future Samsung might not be able to push that hard on Apple. It's because the sole reason Samsung pushes hard on mobile because they are preparing the resume for the guy just arrested to take his father's place. (Although when you think about it, bring found guility might work better for him. ) 
    so, if his sister is trying to leverage this situation and make a play for the chairman office, the last thing she will allow is her brother's Samsung Electronics to have anything good to happen during his arrest, and considering the head is in jail, they just have their blockbuster literally on fire, and Samsung electronics got like 90% profit, she can make a really good case to diversify the company with more service business, which is the branch she's running
    So, if he can't get bail, we can probably see Samsung Electronics slipping in the fall. 
    watto_cobra
  • Reply 8 of 13
    what, no arson charges!?
    gilly017watto_cobratyler821st
  • Reply 9 of 13
    radarthekatradarthekat Posts: 1,558moderator
    Voice of Austin powers:

    "seems like the... heat... is coming down on him"

    "if you can't take the... heat..."

    "where there's smoke, baby..."

    "his arrest is a really... hot... story"

    "finally baby, I've been waiting for him to be... charged"

    edited February 17 watto_cobraStrangeDays
  • Reply 10 of 13
    MplsP said:
    I'm not an expert by any means, but from what I understand of Korean society there are several families that own many of the large companies like Samsung (and Korean Air) and wield a huge amount of power. The arrest of the head of one of these companies must be an incredible and shocking turn of events.
    I maintain that this is really a power struggle inside Samsung since the founder is now out and his young son is weak and inexperienced compared to the warring interests inside the company that are all fighting for control.
    edited February 17
  • Reply 11 of 13
    sog35 said:
    MplsP said:
    I'm not an expert by any means, but from what I understand of Korean society there are several families that own many of the large companies like Samsung (and Korean Air) and wield a huge amount of power. The arrest of the head of one of these companies must be an incredible and shocking turn of events.
    The real key is if he gets any jail time.

    The last Samsung CEO was a 2 time convicted felon, but served ZERO jail time...........cause the Korean President pardoned him 
    it would have to be the next president who can do the pardoning. because under the Korean constitution she has no power at all since the impeachment. Word around here is that he will get a slap on the wrist--house arrest. 
  • Reply 12 of 13
    Seems to run in the family. I stopped buying Samsung products a long time ago because this corp is a bunch of criminals
  • Reply 13 of 13
    MacProMacPro Posts: 15,983member
    I hope the evidence isn't on a Galaxy note 7!
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