Samsung stocks plunge over arrest of heir

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IANS | 17 Feb, 2017
South Korean tech giant Samsung Electronics' stock price plunged on Friday after it was announced that its vice president and heir to the business conglomerate was arrested over his alleged role in a corruption scandal.

Samsung Electronics, one of the stocks that holds the greatest weight in the Seoul Stock Exchange, opened with a sharp decline, hitting 0.60 per cent, and by 9.30 a.m., was down 0.47 per cent to stand at 1.892 million won ($1,653), Efe news reported.

Earlier in the day, Seoul Central District Court authorised Lee Jae-yong's arrest after "new charges and evidence" were presented.

Following the order, the 48-year-old tycoon was immediately arrested and sent to Uiwang Prison, southwest of Seoul.

Lee's arrest comes after prosecutors heading the corruption case that led to the impeachment of South Korean President Park Geun-hye asked for a second arrest warrant against the tycoon on Tuesday.

In a statement, the Samsung Group said it would do its best "to ensure that the truth is revealed in future court proceedings", and again denied allegations of bribery or receiving favours from Park.

South Korean experts believe that the country's largest conglomerate will temporarily suspend all of its operational restructuring as well as new investment plans following the arrest of its de facto leader, Yonhap News Agency reported.

Prosecutors now have 20 days to formalise the detention or release him on probation.

Lee is accused of instructing the conglomerate to give financial support to Choi Soon-sil, nicknamed the "South Korean Female Rasputin", in exchange for the government's backing of a merger between two of the group's subsidiaries.

The same court in Seoul rejected an earlier request for his arrest in January, citing a lack of evidence.

However, prosecutors this week argued that after three weeks of further investigation, they had obtained new evidence and filed new charges.

In addition to bribery, Lee is accused of obstruction of justice and the violation of a law on the transfer of assets abroad.