South Korea: Samsung Vice Chairman denies Bribery Allegations in Park Geun-hye Scandal

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Samsung’s de facto leader Lee Jae-yongdeniedon Fridaybribery allegations at his first court hearingin connection to the influence-peddling scandal that end of last year lead to the impeachment of President Park Geun-hye,state mediareported.

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April 7th, 2017
Embezzlement Justice System

He was charged with bribery, embezzlement, perjury, hiding assets abroad and concealing profit gained from criminal acts.

Lee — the first leader in Samsung’s history to be detained in a criminal probe — was arrested in February for paying 43 billion won (US$ 37.37 million) in bribes to organizations linked to the president’s childhood friend Choi Soon-sil to secure the 2015 merger of two Samsung affiliates and solidify his control of the business.

Park, who was arrested late last month, was named an accomplice in the bribery allegations, Yonhap reported.

She is accused of conspiring with Choi to force dozens of chaebol conglomerates, including Samsung, to hand over some 77.4 billion won (US$ 68.3 million) to foundations controlled by Choi.

At the hearing, Lee’s legal representative said Lee paid the foundations after the "president’s request to promote cultural prosperity and sport development," denying that he expected any favors in return.

"Business restructuring is one of Samsung's various corporate management activities," the lawyer said. "It was not for transferring power."

Separate from the merger, prosecutors described how the Samsung chaebol and Lee benefited from their ties to the Park administration.

Some advantages include the sale of smaller Samsung affiliates, converting Samsung’s life-insurance unit into a financial holdings company and the public offering in 2016 of its biologic-drugs unit.

At some point, these moves require government approval or engagement, according to The Wall Street Journal.

Several experts on the Korean legal system told The Wall Street Journal that a prison sentence of at least three years is highly likely if Lee is convicted, but it could be significantly longer if he is found guilty of all charges.

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