2017 is not starting off any better for Samsung following news that South Korean authorities are seeking a warrant to arrest the de facto head of the company, Jay Y Lee, over allegations of bribery and embezzlement.
2016 was most definitely a year to forget for Samsung, following a series of expensive blunders. The notable disaster with the exploding Galaxy Note7 cost the company billions of dollars to fix, and then reports emerged of it being dragged into the ongoing South Korean presidential scandal.
As we enter into a new year, the latter investigation appears to be increasing in severity and scale, as Bloomberg reports that the company’s vice-chairperson Jay Y Lee – who is expected to follow his father to lead the company – is facing arrest.
1bn won on a horse
The call for arrest is being made by a special prosecution team established to investigate the tech giant – and other major South Korean corporations – to see whether it illegally gave money to Choi Soon-sil, confidant of the country’s president, who is facing calls for her resignation.
As one of the most influential people in the company, Lee is alleged to have engaged in a number of instances of bribery and embezzlement worth a total of 43bn won (€34m).
Some of the alleged extravagant contributions made by Lee to Choi include a horse for her daughter worth 1bn won, as well as billions of won in riding lessons.
Lee is currently leading the company on a de facto basis following his father’s heart attack back in 2014.
‘We can’t accept the prosecutor’s argument’
With the prosecution team now seeking a warrant to arrest Lee and question him over the allegations, a spokesperson for the prosecutor’s office said: “We believe that there was an illegal request made by Samsung in facilitating the process of business succession.”
Samsung has issued its own response to the allegations, denying them outright: “We can’t accept the prosecutor’s argument that we made illegal requests associated with the merger and management succession,” its statement read. “We believe the court will make a wise decision.”
The arrest of the effective head of Samsung would represent a major crisis for the company, and possibly the country’s economy, with nearly one-quarter of the country’s GDP coming from the tech giant.
Get your early bird tickets now!