South Korean former minister arrested over corruption

Moon Hyung-pyo facing charges of pressuring national pension fund to back a merger that benefited Samsung but lost subscribers hundreds of millions of dollars.

People attend a protest demanding South Korean president Park Geun-hye’s resignation in Seoul on December 31, 2016. Kim Hong-ji / Reuters

Seoul // The head of South Korea’s national pension fund was arrested on Saturday in a widening investigation to determine whether impeached president Park Geun-hye took bribes from businesses including Samsung.

Moon Hyung-Pyo admitted to pressuring the state-run National Pension Service (NPS) to back a controversial merger of two Samsung units when he served as health minister from December 2013 to August 2015.

The Seoul central district court issued a warrant for his arrest after reviewing evidence provided by a special prosecutor investigating the bribery scandal.

Mr Moon was taken into emergency detention on Wednesday over allegations that he pressured the fund to vote in favour of the merger between Cheil Industries and Samsung C&T last year.

The acquisition was seen as a crucial step to ensure a smooth father-to-son power transfer to Lee Jae-yong, scion of Samsung’s founding family.

Critics said it undervalued Samsung C&T stock but NPS – the world’s third-largest public pension fund and a major Samsung shareholder – backed the deal, allegedly incurring hundreds of millions of dollars in losses for NPS subscribers.

Investigators reportedly plan to question Mr Lee next month to determine whether he told Samsung Electronics executives to funnel millions of dollars into dubious foundations and companies controlled by president Park’s friend Choi Soon-sil in return for the NPS backing.

Mr Lee said at a parliamentary hearing this month that he was not aware of the money transfers.

Ms Park is accused of colluding with her friend to strong-arm companies including Samsung into handing over tens of millions of dollars to questionable foundations and companies controlled by Ms Choi.

Ms Choi has been indicted on charges of abuse of power and coercion.

Parliament voted to impeach Ms Park on December 9, accusing her of constitutional and criminal violations ranging from a failure to protect people’s lives to bribery and abuse of power.

The case is now being considered by the constitutional court, which was given 180 days to rule on the validity of the impeachment.

The scandal has prompted massive weekend protests to demand Ms Park’s removal from office and arrest, with hundreds of thousands of people turning out again on New Year’s Eve.

“I came here to help usher in a new year that has no Park Geun-hye,” said Kang Jae-chun, who was at the protest with his two children.

Demonstrators also planned to take part in a midnight ceremony in which a large bronze bell in the city centre is rung to herald the new year.

But Ms Park, who has been suspended from her duties since the impeachment vote, has remained defiant, declaring she will wait until the constitutional court arrives at a decision.

* Agence France-Presse