Samsung chief Jay Y. Lee was arrested Friday morning for his alleged role in a corruption scandal involving South Korea’s president.
President Park Geun-hye was impeached in December following accusations that she allowed her friend Choi Soon-sil to influence government affairs.
Prosecutors have accused Lee, 48, of bribing Choi, who is suspected to have procured donations from private companies for personal gain in exchange for the government allegedly granting favors to those companies.
Investigators have alleged that Lee spent 43 billion won ($37.8m) to a business and foundations backed by Choi Soon-sil in return for support by the state pension fund for the merger of two Samsung affiliates in 2015.
He is also suspected to have given bribes to Choi’s daughter to develop her equestrian career.
Asian shares have fallen as a result of the arrest, while shares in Samsung Electronics Co Ltd fell by 1.1 percent and shares in Samsung Group, the holding company, were down 2.8 percent.
Lee, who is heir to the country’s wealthiest family, is being held at Seoul Detention Centre. He is not the first member of his family to be accused of criminal activity. Hiis elder brother Lee was twice convicted of financial crimes, although never imprisoned. Lee’s father was handed a three year jail sentence in 2009 for tax evasion, but was later pardoned and also never imprisoned.
Police have been investigating Lee for several weeks. The prosecution previously said in January it might take into account the potential economic impact of arresting the Samsung chief.
Choi is on trial for fraud and abuse of authority. She has been dubbed the “Rasputin” of South Korea due to her alleged government influence.Try Newsweek: Subscription offers