Samsung boss arrested in South Korea's explosive corruption scandal

Lee Jae-yong has been arrested over allegations of bribery, perjury and embezzlement risks disrupting decision-making at the powerful company. Photo / AP

Samsung's de facto head, Lee Jae-yong, was arrested in Seoul on charges of bribery over his alleged role in an explosive corruption scandal that has riveted South Korea.

The 48-year-old heir apparent to the Samsung empire was taken into custody after the courts, which had rejected a special prosecutor's first request, granted a second request to issue a warrant for his detention.

That means that both the head of South Korea's largest conglomerate and the country's president have fallen - at least temporarily - in the widening scandal that revolves around allegations of bribery and influence at the highest levels.

"The rationale for and the necessity of his arrest is acknowledged considering the new charges and additional evidence collected," Seoul Central District Court said in a text message sent to reporters, according to the Yonhap News Agency.

In a one-line statement, Samsung said: "We will do our best to ensure that the truth is revealed in future court proceedings."

Prosecutors added charges of hiding criminal proceeds and violating the law on transferring assets overseas to their initial charges against Lee of bribery, embezzlement and perjury. In December, the court said that prosecutors had not made a sufficient case for Lee's detention, an interim victory for Samsung.

The case relates to an ever-widening political scandal revolving around President Park Geun-hye and her secret confidante, Choi Soon-sil, who is accused of profiting off her relationship with the president.

The National Assembly voted in December to impeach Park over her alleged role in the case, leading her to be suspended from office while the Constitutional Court decides whether to approve her impeachment. Its ruling is expected early next month.

Choi, who is currently on trial for bribery, coercion and abuse of power and has denied all charges, is alleged to have extracted money from major South Korean businesses as payment for using her connections to win favorable treatment from the government for the companies.

Samsung - upon Lee's order - is accused of paying some US$36 million (NZ$49.9m) in bribes to Choi in exchange for the government's support for a crucial merger of two Samsung affiliates in 2015.

Although Lee is technically vice chairman of the group, he has in effect been running the company for almost three years while his ailing father lies unconscious in hospital.

Many of the allegations in the case revolve around the Lee family's suspected efforts to keep control of the corporate behemoth.

In return for the US$36m (NZ$49.9m) in payments, Choi allegedly put pressure on authorities to approve the US$8 billion (NZ$11b) merger of two Samsung units, part of a plan to strengthen the family's hold on the group, which it controls through a complex web of cross-shareholdings, despite owning only a tiny stake of it.

The National Pension Service, a major Samsung shareholder, is suspected of supporting the merger on Choi's instruction. The head of the service, a former health minister, has been indicted in relation to the scandal.

At a parliamentary hearing in December, Lee denied being involved in any bribery scheme but admitted that Samsung had given a US$900,000 (NZ$1.2m) horse to Choi's daughter, an Olympic equestrian hopeful.