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Samsung Head Lee Jae-yong Indicted; What Does It Mean For Samsung?

By March 1, 2017 at 4:02 am
Samsung's Lee Jae-yong indicted. (Photo : Getty Images)

Samsung vice-chairman Lee Jae-Yong has been indicted on bribery charges in the ongoing corruption case against Choi Soon-sil.

Lee's indictment was announced after the special prosecutor's office wrapped up its three-month investigation of a major corruption scandal that caused the impeachment of South Korean President Park Geun-Hye.

The 48-year-old Lee is accused of giving about $38 million to Choi, a close friend of Park, in return for government support for the merger of two of Samsung's affiliate companies in 2015. The special prosecutor's office claimed that then president Park ordered the National Pension Service to support the proposed merger.

The merger reportedly caused the government-run National Pension Service to lose around $123 million in stocks while boosting the stock value of Lee's family by about $758 million. More importantly, it cemented Lee's control of the company after his father, Lee Kun-hee, suffered a heart attack in 2014.

The heir to the Samsung dynasty has also been accused of perjury when he testified at a parliamentary hearing that he did not bribe either Choi or Park. Instead, he claimed that Samsung was forced by Choi to make "donations" to her cause.

Samsung hasn't released any statement regarding Lee's indictment. The company had previously said that it will clear Lee's name at the trial.

As the vice chairman, Lee's situation has left a big vacuum in the company's management and at a time when the tech giant is trying to regroup after the debacle caused by the Galaxy Note 7.

Lee's indictment will also be a test for the current administration as citizens wait to see if the government will finally stand up against the chaebol or family-controlled companies.

There have always been strong ties between the government and the chaebol, which usually have a strong control over the economy. However, South Koreans have shown that they're finally fed up with the corruption and favoritism that previous governments had always shown big companies.  

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