Roger Fingas
South Korea's Central District Court has approved an arrest warrant for the acting head of the Samsung Group, Jay Y. Lee, a report indicated on Thursday.
At the same time, the court has rejected a warrant for the company's president, Park Sang-jin, Reuters said. Warrants for both executives were requested by a special prosecutor's office on Tuesday.
Lee has been implicated in the widening corruption scandal surrounding the country's President, Park Geun-hye, and her close friend Choi Soon-sil. When it petitioned for a warrant, the prosecutor's office accused Lee of bribery, perjury, embezzlement, and hiding assets overseas.
In particular Samsung is accused of funneling $37.31 million to a business and several organizations backed by Choi with the hope of her supporting the merger of two Samsung affiliates. This included supporting the equestrian career of Choi's daughter — Park Sang-jin, significantly, is the head of the Korea Equestrian Federation.
The special prosecutor first sought a warrant for Lee in January, but was shot down by Central District Court Judge Cho Eui-yeon, who questioned "the necessity and substantiality of an arrest at the current stage."
The executive's arrest is likely to be disruptive for the Samsung Group as a whole, especially as Lee has been more of a stand-in leader following his father's 2014 heart attack. Officially he's the vice chairman of Samsung Electronics, which competes with Apple via products like the upcoming Galaxy S8.
Individually the Electronics unit should be able to continue on without many short-term problems, since devices like the S8 are already in the pipeline.
While Samsung is Apple's chief competition in the mobile space, the two companies have been mutually dependent for years in terms of supply. Apple has reportedly signed a $4.3 billion deal for 5-inch OLED screens, likely destined for an "iPhone X" or "iPhone 8" shipping later this year.
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12 Comments
Huge.
I said things were changing here and that he was more than likely going to face charges.
Looks like his future is going up in flames.
Wait.
Burned!
This is the kind of person, company, and corporate culture that Apple has to compete against. It's like having to get into a fist fight with one hand tied behind your back.
Kudos to the S. Korean authorities for taking a hard line on this, and not hesitating to make an example of (arguably) the most important company in that country. Whether it actually roots out corruption or not, it sends an unambiguous signal the costs for such behavior have been raised.