Samsung heir accused of bribery, perjury as trial opens

By AFP   April 7, 2017 | 03:04 pm GMT+7
Samsung heir accused of bribery, perjury as trial opens
Samsung Group chief Jay Y. Lee arrives at a court in Seoul, South Korea, April 7, 2017. Photo by Reuters/Kim Hong-Ji

He has been charged with four other Samsung executives.

The heir to the huge Samsung business empire appeared in court Friday at the start of his trial for embezzlement and perjury, part of a corruption scandal that brought down South Korea's president.

Lee Jae-Yong, the vice-chairman of Samsung Electronics, was brought into the Seoul Central District Court bound and handcuffed.

Lee, who was arrested in February, has been charged with paying nearly $40 million to the now-impeached president's close friend Choi Soon-Sil, allegedly as bribes to secure policy favors.

Four other Samsung executives have also been charged.

Special Prosecutor Park Young-Soo said in his opening statement that Lee's case is "one of the most deep-rooted and typical cases involving unhealthy relations between politicians and businessmen".

"In the course of providing bribes, Lee Jae-Yong embezzled company money, illegally diverted domestic assets abroad, hid illegally-earned incomes and committed perjury at parliament," the prosecutor said.

"The Choi case has left a deep scar in history but it has also provided momentum to re-establish the rule of laws by dint of people's power," the prosecutor said.

Ousted president Park Geun-Hye was thrown into jail last week after a court ordered her arrest in connection with the sweeping corruption scandal that brought millions of people onto the streets and saw her impeached.

Her close confidante Choi is also on trial for forcing top South Korean firms, including the tech giant, to "donate" nearly $70 million to non-profit foundations which she allegedly used for personal gain.

'Prejudice and prejudgment'

Lee's defense lawyers however said the payments to Choi were charitable contributions for sports and culture development that Samsung was obliged to make under pressure from officials, and not bribes.

The legal team said the prosecutor's charges against Lee were based on "prejudice and prejudgment" and not backed up by evidence.

Prosecutors said Lee had asked for policy favors in return for the bribes when he spoke to Park alone during three meetings from 2015 to 2016 -- an allegation later dismissed by the defense team.

The verdict is expected to be delivered in late May.

One of the favors Lee allegedly sought from president Park was state approval for a controversial merger of two Samsung units in 2015, seen as a key step to ensure a smooth transfer of power to him.

The deal was opposed by many shareholders who said it had willfully undervalued one of the two firms. But it eventually went through after the national pension fund -- a major Samsung shareholder -- approved it.

Lee's arrest, the first for a Samsung chief even though his father was twice convicted of bribery, sent shockwaves through the company and triggered the announcement of a major reform of its top-down management style.

Lee has effectively been at the helm of Samsung since his father suffered a heart attack in 2014.

As the trial kicked off, Samsung Electronics announced it expects profits to jump by half in the first quarter, despite a smartphone recall fiasco and Lee's arrest.

The scandal has cast a renewed light on the cozy ties traditionally enjoyed by the government and the family-controlled conglomerates known as "chaebols" that dominate the country's economy.

The groups have increasingly become objects of public scorn as criticisms mount over their management practices, including rapid promotions for family members -- some of whose antics have battered the firms' reputations.

Millions of South Koreans taking part in weekly street rallies demanding Park's removal have also called for the arrest of the tycoons involved in the scandal, including the leaders of Hyundai, SK and Lotte.