Prosecutor Makes Case Today for Putting Samsung Heir in Jail

Samsung’s Jay Y. Lee appeared this morning at a court hearing on the prosecutor’s request for an arrest warrant, walking through a throng of reporters without comment. The prosecutor is investigating Lee for alleged embezzlement and perjury as well as bribery. Samsung has denied any wrongdoing and said it anticipates the court will decide not to detain Lee, 48. The court is expected to rule within 24 hours.

Investigators plan to continue pursuing the Lee case whatever the court’s decision. The special prosecutor was set up to investigate allegations that Korea’s largest companies gave money to benefit a friend of President Park Geun-hye in exchange for government support. Investigators are seeking Lee’s arrest despite the potential blow to Samsung, Korea’s biggest company and largest employer, Bloomberg reported.

“The special prosecutor considered the economic impact when seeking an arrest warrant, but he thought it is more important to seek justice,” Lee Kyu-chul, a spokesman for the prosecutor’s office, said this week.

To detain Lee, investigators will have to provide compelling reasons for keeping him in jail while they assemble their case. Arrest warrants are typically given when a suspect is a flight risk or may destroy evidence, according to legal experts. Investigators haven’t made their full case public yet, but prior examples suggest it would be unlikely for the warrant to be granted.

“From the legal point of view, I think the court will likely reject the prosecutor’s request for an arrest warrant,” said Kang Shin-up, an attorney at the firm Hana. “But if it is approved, maybe the court sees the case as a last chance to cut off the cozy relationship between politics and business."

The court decision may grant a warrant this time because of the high stakes, involving the president and the de facto head of the country’s most powerful company.

“Given this is a high-profile bribery case involving the head of state, it may affect the judge’s decision in granting a warrant,” said Han Kyeong-jae, a lawyer at Seoul’s Chung-ho Partners.

The Samsung probe is part of a broader investigation into contributions that dozens of Korean companies gave to Choi Soon-sil, the Park confidante. The scandal has rocked South Korea with millions of people taking to the streets in protest. President Park has been impeached and her powers suspended. A separate constitutional court will determine whether she is ultimately removed from office, another tumultuous chapter for a country that became a full-fledged democracy in 1987.

In the case of Samsung, investigators have focused on whether the company made payments to win the backing of Korea’s national pension fund for a controversial merger between Samsung affiliates. The deal, involving Cheil Industries Inc. and Samsung C&T Corp., was approved in 2015 and made it easier for Lee to gain influence over the sprawling conglomerate.

Prosecutors this week indicted Moon Hyung-pyo, former chairman of the pension service, for perjury and abusing his authority. Moon acknowledged that he pressured NPS officials to support the Samsung merger, investigators said last month.