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Samsung’s trial

Feb 20,2017
The ramifications from Samsung Group leader Lee Jae-yong’s arrest will be big. The 48-year-old scion will be the first member of the Lee family to be detained. It is unfortunate that the country’s top corporate head, who does not pose a risk of fleeing or destroying evidence, is under custody. But his arrest shows that special prosecutors have persuaded the court on its case against President Park Geun-hye and her secretive confidante Choi Soon-sil for taking 43.3 billion won ($37.6 million) from Samsung, allegedly in return for political favors.

The court granted the warrant on two grounds. It agreed on the validity of the new criminal charge based on additional evidence from prosecutors. They hoped to prove the Blue House was involved in the 2015 merger of Samsung C&T and Cheil Industries that strengthened Lee’s control over the group. Their investigation dug into government favors after the merger, such as favorable cross-sharing regulations and the transition of Samsung Life Insurance into a financial holding group. Prosecutors presented notes from An Chong-bum, President Park’s former senior policy coordination secretary who kept records on corporate funds and what the government could do to reward them.

Physical detention does not make someone guilty. An arrest warrant can be issued upon probable cause. A court delivers a ruling strictly based on evidence. It is now up to the court to decide whether Lee is guilty. His arrest will have an influence on special prosecutors’ request to extend the timeline of their investigation. They argue that they need more time to question the president and her former senior secretary for civil affairs Woo Byung-woo. Park must comply with the questioning without any conditions attached. Without it, the probe on her power abuse scandal cannot be concluded.

Opposition parties are seeking to extend the investigation period without the need for endorsement from the acting president. But the move could be blocked by the ruling party. Prime Minister Hwang Kyo-ahn, the acting president, should make a decision as to not disturb the investigation.

Meanwhile, the country’s top conglomerate remains leaderless. Without the owner’s quick decision making, Samsung Electronics would not have acted so fast and resolutely on discontinuing the Galaxy Note7. It also could not have pushed ahead with a mega deal like the $8 billion acquisition of Harman International. The news also bodes badly for its global rank and credibility. Samsung could lose international bids if its management is accused of wrongdoing. The company should do all it can to keep its ship intact.

JoongAng Ilbo, Feb. 18, Page 26