The decision means the court saw that Lee was behind the tech giant’s donation of 43.3 billion won ($37 million) to President Park Geun-hye’s confidante Choi Soon-sil in exchange for business favors. Cheong Wa Dae is accused of having played a role in a 2015 merger of two Samsung affiliates -- Samsung C&T and Cheil Industries -- which facilitate Lee’s takeover of corporate control from Lee Kun-hee, his incapacitated father and the group’s chairman.
|Lee Jae-yong, vice chairman of Samsung Electronics Co. (Yonhap)|
After the court’s initial dismissal of the arrest warrant on Jan. 19, the special investigators had been striving to fortify its reasons for the arrest request.
The smoking gun came early this month when the team secured an additional 39 journals used by An Chong-bum, a jailed former senior presidential secretary.
In the documents were detailed instructions made by Park from June 2014 to November 2016, including papers for her meeting with Lee last February, the third round of one-on-one talks following sessions in September 2014 and July 2015.
During the gatherings, Lee asked for help with the management succession, and Park requested support for Choi’s culture and sports foundations, which were practically her slush funds, the prosecutors argue.
Samsung’s succession issues broke out after the elder Lee abruptly fell ill in May 2014.
In broadening Lee’s charges, the team newly raised suspicions that the presidential office forced related state agencies to change rules to assist a 2015 intra-group stake sale and a 2016 initial public offering of Samsung Biologics, a biodrug unit.
In 2015, the Fair Trade Commission sparked controversy after overturning its initial order for Samsung SDI to sell 10 million shares in C&T, which reflected concerns over the group’s recurring cross-shareholding. Cheong Wa Dae allegedly pressured the antitrust watchdog to cut the amount by half.
Korea Exchange, the nation’s top bourse, is suspected of offering favors when Samsung Biologics was about to go public, despite its operating loss for a third straight year, which disqualifies the firm for an IPO.
As part of the efforts, the investigators raided the FTC and the Financial Supervisory Commission on Feb. 3.
Judge Han Jeong-seok at the Seoul Central District Court said in his ruling that the arrest was necessary, citing the “newly composed facts of criminal charges and additionally collected evidence.”
“The previous time, the bribery charges were chiefly comprised of the compensational relations over the merger between Samsung C&T and Cheil Industries. And after three weeks of investigation, we concluded that not only the merger but the overall succession was the overarching issue,” counsel spokesperson Lee Kyu-chul said at a news briefing.
“There were three rounds of one-on-one talks, which provided further grounds for our claim, so we changed the criminal facts, increased the amount related to the embezzlement and added other charges such as a concealment of proceeds of crime and the flight of domestic properties.”
By Shin Hyon-hee (email@example.com)