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Park Geun-hye

South Korea pension chief arrested in corruption probe

Moon Hyung-pyo, who is now head of the National Pension Service (NPS), admitted to pressuring the state-run fund to back a controversial merger of two Samsung units when he served as health minister between 2013-2015

PUBLISHED : Saturday, 31 December, 2016, 1:17pm
UPDATED : Saturday, 31 December, 2016, 1:20pm

South Korea’s former health minister was arrested under a court order Saturday in a widening probe to determine whether impeached President Park Geun-hye took bribes from businesses including Samsung.

Moon Hyung-pyo, who is now head of the National Pension Service (NPS), admitted to pressuring the state-run fund 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, Yonhap news agency said.

Moon was taken into emergency detention on Wednesday on 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 Lee next month to determine whether he told Samsung Electronics executives to funnel millions of dollars into dubious foundations and companies controlled by Park’s friend Choi Soon-Sil in return for NPS’ backing.

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

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

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

Parliament voted to impeach 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 up to 180 days from this date to rule on the validity of the impeachment.