Another blow for Samsung, group chief Jay Lee arrested

Samsung is already recovering from losses after the recall of its flagship Galaxy Note 7 device

Samsung Group chief Jay Y Lee was held on Friday over allegations of corruption in a scandal that led Parliament to impeach South Korean President Park Geun-hye. The 48-year-old has been accused of paying $36 million to the South Korean President’s secretive confidante, Choi Soon-sil, in return for political favors.

Lee has been questioned several times over his alleged role in the scandal that has rocked the nation. The instances of alleged bribe include government support for a merger of two Samsung affiliates in 2015 that helped Lee inherit corporate control from his father, Lee Kun-hee.

He was called a key suspect in the scandal and narrowly missed being formally arrested in January over the lack of evidence. His arrest is likely to be a big blow for the Samsung group, which is a major part of the South Korean economy and includes the world’s largest smartphone maker, Samsung Electronics.

The group is already recovering from losses after the recall of its flagship Galaxy Note 7 device. Reports suggest that the group can face sanctions from overseas authorities if Lee is punished.

Lee was already being held at a detention centre after appearing in court on Wednesday as judges took the call whether to issue an arrest warrant.

The scandal centres around Choi Soon-Sil, who is accused of using her connections with Park forcing local firms to “donate” nearly $70 million to non-profit foundations. These “donations” were allegedly used bu Choi for personal gain. Samsung was the single biggest donor to the foundations.

There are chances that an arrest warrant may be issued against for another Samsung executive over bribery charges.