South Korean prosecutors look to arrest head of Samsung in influence scandal

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Following 15 hours of questioning the executive on Monday, a South Korean special prosecutor's office is once again seeking an arrest warrant for the head of the Samsung Group -- Jay Y. Lee -- in an influence-peddling scandal threatening to topple the country's President, Park Geun-hye.




The office is also filing for a warrant to arrest Samsung president Park Sang-jin, Reuters reported on Tuesday. Both executives are potentially facing charges of bribery, embezzlement, and concealing assets overseas, while Lee would be targeted with an additional perjury charge, new since the first failed attempt at securing an arrest.

More details are due to be announced in a briefing on Wednesday. A hearing on the warrants is scheduled for Thursday.

"Samsung has absolutely never bribed the president seeking something in return or sought illicit favors," Samsung said in an official statement.

The company is accused of spending $37.31 million on a business and various organizations backed by Choi Soon-sil, a close friend of Korean President Park Geun-hye, in exchange for her support in the merger of two Samsung affiliates. This even includes sponsoring the equestrian career of Choi's daughter, who was eventually arrested in Denmark after being sought by Korean officials.

Park is still technically in office, but parliament voted to impeach her in December, specifically for her allegedly colluding with Choi to pressure businesses into donating to foundations supporting Park's initiatives. If the country's Constitutional Court upholds the impeachment, Park will be forced from office -- a first for any elected Korean leader.

Lee is officially the vice chairman of Samsung Electronics, the division that competes with Apple through products like the Galaxy S7 smartphone. Practically speaking, however, he has been in charge of the Samsung Group since his father's 2014 heart attack.

His arrest would be disruptive to Samsung Group as a whole, but likely not to Samsung Electronics except for any long-term strategies. Products such as the Galaxy S8 and Galaxy Note 8 are already in the pipeline, and the company can probably continue designing and releasing phones without Lee's help.

Despite their rivalries, Apple is dependent on Samsung for parts. The former is said to have signed a $4.3 billion deal for 5-inch OLED screens, expected to appear in an "iPhone 8" or "iPhone X" shipping later this year. It's not clear whether the device will have a 5.1, 5.2, or 5.8-inch screen.

Comments

  • Reply 1 of 16
    jbdragonjbdragon Posts: 2,134member
    I can't believe this is still dragging on. South Korea and Samesung and pretty much one and the same. I can't believe they haven't covered this all up yet.
    caliwatto_cobrar00fus1
  • Reply 2 of 16
    Could this finally mean the nails to the coffin are ready to be nailed in?
    caliwatto_cobra
  • Reply 3 of 16
    JinTech said:
    Could this finally mean the nails to the coffin are ready to be nailed in?

    They still have to decide which nails are the best, then tool up to copy them cheaply, once they get them working well (not exploding when you drive them in) then they will be 'ready to be nailed in'. Beware though as a previous attempt at making threaded fasteners (to could screw everyone) had serious problems as they regularly heated up and literally exploded. /s
    magman1979Rayz2016john.bcaliwatto_cobra
  • Reply 4 of 16
    dewmedewme Posts: 2,094member
    A sad steaming culture of corruption. It will be difficult to keep this from casting a shadow on Samsung as a whole. Flaming phones are the least of their cancerous problems. 
    bigcaliwatto_cobra
  • Reply 5 of 16
    boredumbboredumb Posts: 1,415member
    This is one of the very first things I can remember Samsung doing...
    without Apple doing it first! :D
    caliglynhwatto_cobrabrakken
  • Reply 6 of 16
    Oh, boy. This may be contributing to the sudden upward explosion of AAPL stock.
    caliwatto_cobra
  • Reply 7 of 16
    dysamoriadysamoria Posts: 2,207member
    Oh, boy. This may be contributing to the sudden upward explosion of AAPL stock.
    The irrationality of stock markets is the driver behind that.
    john.bwatto_cobra
  • Reply 8 of 16
    dysamoria said:
    Oh, boy. This may be contributing to the sudden upward explosion of AAPL stock.
    The irrationality of stock markets is the driver behind that.
    Buy-sell decisions are individually rational, but seem irrational in the aggregate.
  • Reply 9 of 16
    lkrupplkrupp Posts: 7,149member
    dysamoria said:
    Oh, boy. This may be contributing to the sudden upward explosion of AAPL stock.
    The irrationality of stock markets is the driver behind that.
    So you’re saying AAPL isn’t worth $133?
    watto_cobra
  • Reply 10 of 16
    calicali Posts: 3,495member
    I can't wait to see these scumbags fold. 
    watto_cobrabrakken
  • Reply 11 of 16
    The Korean government will not do not. Samsung is like the bread and butter for Korea. And Korean economy is very shaky right now because HANJIN Shipping which was like the world's 6th biggest vessel company went bankrupt and that had ripple effect which also hurt another Korean vessel company HYUNDAI Merchant Marine. Samsung also had a bad year in 2016 due to Note 7 debacle. I REALLY HOPE HE GETS WHAT HE DESERVES BECAUSE SAMSUNG IS VERY SHADY AND EVIL COMPANY.
    watto_cobra
  • Reply 12 of 16
    The Korean government will not do not. Samsung is like the bread and butter for Korea. And Korean economy is very shaky right now because HANJIN Shipping which was like the world's 6th biggest vessel company went bankrupt and that had ripple effect which also hurt another Korean vessel company HYUNDAI Merchant Marine. Samsung also had a bad year in 2016 due to Note 7 debacle. I REALLY HOPE HE GETS WHAT HE DESERVES BECAUSE SAMSUNG IS VERY SHADY AND EVIL COMPANY.
    CEOs are replaceable. It's quite possible this is actually happening due to a power struggle within the company, because there's ample evidence that Samsung has used bribery in the past.
  • Reply 13 of 16
    MacProMacPro Posts: 18,293member
    I wonder if Gatorguy's job is in danger?  ;)
    watto_cobra
  • Reply 14 of 16
    volcanvolcan Posts: 1,789member
    cali said:
    I can't wait to see these scumbags fold. 
    I know everyone around here thinks Samsung = mobile phones but the fact is that mobile phones makes up only 8% of Samsung Electronics revenue and although Samsung Electronics is the flagship division of Samsung Group it is only one of many different industries and divisions in a very diversified conglomerate. They would be about as likely to "fold" as Berkshire Hathaway.
    edited February 2017
  • Reply 15 of 16
    volcanvolcan Posts: 1,789member
    kray_figment said:

    Samsung also had a bad year in 2016 due to Note 7 debacle.

    Unless you work in the Samsung Group's financial department there is no way to know whether they had a bad year or not in 2016. The last annual report that they released was for 2014.

    It is estimated that the Note 7 recall cost $5 billion. The Samsung Group probably earned $30+ billion in profit in 2016 with $300-400 billion in revenue. The Note 7 issue was not really a huge deal when compared to the overall size of the company.

  • Reply 16 of 16
    Just how many fingers in how many pies?!?
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