Samsung scion to be indicted on bribery charges

Samsung scion to be indicted on bribery charges

Samsung has been at the center of a South Korean political scandal for the last several months, and now, the government has chose to bring charges. Industry observers predict Samsung will have Samsung Electronics, Samsung Life Insurance, and Samsung C&T to lead discussion on making major business decisions from now on. In particular, Lee allegedly gave some $40 million to Choi Soon-sil, a close aide of Park who is at the center of the influence-peddling scandal.

Lee was arrested this month despite repeatedly rejecting allegations that he offered bribes worth tens of millions of dollars to ensure government support for a 2015 merger aimed at ensuring a smooth power succession from his ailing father, Samsung Chairman Lee Kun-hee.

Lee was arrested on February 17 after fresh evidence emerged in a long-running political bribery scandal which was accepted by the Seoul Central District Court. Lee's part in the whole affair is said to stem from donations to foundations totalling almost $40 million to help assuage a merger between two Samsung subsidiaries. Chang Choong-ki and Park Sang-jin, presidents at Samsung who also face criminal charges, will resign and leave the company as well. Four other Samsung executives will be indicted without detention.

The merger helped Lee, the billionaire vice chairman, promote a father-to-son transfer of leadership and wealth at the group.

The news of the formal charges against the five has had little immediate effect on the markets, with Samsung shares ending slightly higher on Tuesday.

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"The indictment describes in detail the private conversation between Jay Y. Lee and President Park Geun-hye".

Lee Jae-yong, known as Jay Y Lee, the 48-year-old head of Samsung Group, will be charged later today with bribery, embezzlement, perjury and concealing the proceeds of crime.

Following the news of the indictment, Samsung also announced it fired three directors involved, but Lee was not one of them. He had been accused of bribing the suspended South Korean president, Park Geun-hye.

Another potential risk is a change in South Korea's government, which could apply more pressure against the system of chaebols, the tightly linked business conglomerates in the country that are controlled by a handful of families. He received a presidential pardon in 2009 with the hope that he would help South Korea's bid to host the 2018 Winter Olympics.

However, South Korea's constitutional court is expected to declare the results based on the impeachment votes, before the retirement of Lee Jung-mi, the acting chief justice, on March 13.

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