South Korea Court Denies Arrest of Samsung Heir Jay Y. Lee

(Bloomberg) -

A court in South Korea turned down a prosecutor’s request to arrest Samsung Group’s Jay Y. Lee on alleged bribery, perjury and embezzlement, letting him stay in place atop the country’s most powerful company while they continue their investigation.

The de facto head of the Samsung Group and vice chairman of Samsung Electronics Co. is suspected of providing tens of millions of dollars to benefit a close friend of South Korean President Park Geun-hye in exchange for approval of a merger between two Samsung affiliates. The deal helped Lee, 48, consolidate control over the sprawling conglomerate founded by his grandfather.

Samsung has denied that it provided financial aid in return for any favors. The decision lets Lee avoid spending weeks or months in jail and proceed with plans to secure his leadership atop the country’s biggest company, after his father was incapacitated by a heart attack two years ago. Samsung is also seeking to recover from last year’s botched debut of the Note 7, a smartphone that was discontinued after it showed a tendency to catch fire and explode.

The Samsung probe is part of a broader investigation into contributions that dozens of Korean companies gave to Choi Soon-sil, a confidante of Park. The scandal has rocked South Korea with millions of people taking to the streets in protest. President Park has been impeached and her powers suspended. A separate constitutional court will determine whether she is ultimately removed from office, another tumultuous chapter for a country that became a full-fledged democracy in 1987.