South Korean prosecutors seek the arrest of Samsung's Vice Chairman
Jay Y. Lee allegedly had the equivalent of $36 million wired from Samsung subsidiaries to accounts belonging to the family of Choi Soon-sil, a confidante to South Korean President Park Geun-hye. Money was also said to be wired into a pair of foundations run by Ms. Choi. The payouts were supposedly made so that South Korea's president could help smooth over the father-to-son transfer of Samsung's ownership.
Special prosecutor Park Young-soo said that the money represented a bribe by Samsung, and some of the funds were embezzled by Mr. Jay. His dad, Samsung's current chairman, was convicted in 1996 of bribery; in 2009 he was convicted of tax evasion and breach of trust. Both times he was not arrested, and his convictions were erased with a presidential pardon allowing him to return to Samsung. Thus, an arrest of Mr. Jay would represent a change in what the South Korean government is willing to put up with when it comes to business as usual.
Samsung issued a statement today denying that it paid bribes or asked for special consideration from South Korea's president. The company is the largest manufacturer of smartphones in the world.