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Samsung head Jay Y. Lee arrested over alleged bribes

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World

Samsung head Jay Y. Lee arrested over alleged bribes

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COMING UP:Samsung head Jay Y. Lee arrested over alleged bribes

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00:00:00
>>
FOREIGN]
> A dramatic twist in South Korea's sweeping national scandal. Samsung boss Jay Y Lee arrested on Friday. And prosecutors say they want to indict him on charges beyond previous bribery allegations. Now they're suspicious of the entire process of the Lee family succession within Samsung. Tacking on counts of embezzlement, hiding overseas assets, and perjury.
00:00:24
As Reuters Tony Monroe reports, the timing couldn't be worse for the company.>> Samsung is, of course, the dominant conglomerate here in South Korea. And Jay Lee has been its de facto leader for less than three years. He's only 48, he was in the process or has been in the process of restructuring the group to smooth his generational succession.
00:00:47
And this is very disruptive for the group at a time when there are quite a few things going on. As it tries to get past the disastrous roll out last year of its Galaxy Note 7 which had fire problems, as most people now know.>> Lee's alleged bribery ties into the same top level corruption scandal that's already led Parliament to impeach South Korean president Park Geun-hye.
00:01:11
Samsung is accused of paying out $38 million in bribes to organizations tied to Park's friend, to secure official support for a merger of two Samsung units, and cement Jay Y Lee's control of the family business. The same court that okayed Lee's arrest warrant on Friday rejected it the month before.
00:01:30
Which means the prosecution likely has new evidence for thinking he belongs behind bars. And a stronger case against Lee, doesn't bode well for President Park. It may weaken her defense if she loses her legal immunity as president and faces trial. The day to day running of Samsung shouldn't be too badly affected.
00:01:47
But Lee's arrest could have an impact on long term investment strategy. For now, his new home stands in sharp contrast to his $4 million Seoul mansion, an isolated cell with a toilet, a sink and a mattress on the floor.