January 16, 2017: 12:36 AM ET
CNN
Prosecutors have issued an arrest warrant for Samsung's heir apparent over allegations of bribery, perjury and embezzlement.
The move against Samsung Electronics Vice Chairman Lee Jae-yong on Monday is part of an investigation into a massive political corruption scandal that has shaken South Korea's political and business elites.
Lee is now set to appear Wednesday before a judge who will decide whether the arrest warrant is valid. If it is, the man tapped to head the country's biggest conglomerate will be taken into detention.
The arrest warrant for Lee came on the same day that National Pension Service chief Moon Hyung-pyo was indicted on charges of perjury and abuse of power. Moon is accused of pressuring the pension fund to support a contentious merger of two Samsung affiliates in 2015 when he was minister of health and welfare. The merger helped Lee strengthen his control over Samsung Electronics (SSNLF).
The charges are the latest developments in the far-reaching scandal that has driven thousands of South Korean protestors to the streets and prompted lawmakers to vote to impeach President Park Geun-hye.
Samsung Electronics wasn't immediately available to comment on the announcement of the arrest warrant for Lee. The National Pension Service, which was a major shareholder in one of the Samsung subsidiaries involved in the 2015 merger, declined to comment on Moon's indictment.
Samsung Electronics stock dropped nearly 3% shortly after news of the arrest warrant went public. The shares are down around 6% since Thursday, when Lee was named as a suspect in the corruption scandal and taken in for questioning.
Lee and other top South Korean business leaders are being investigated over donations their companies made to foundations controlled by Park confidante Choi Soon-sil, the woman at the center of the influence-peddling scandal. Prosecutors say the payments were made in return for political favors, an allegation the business leaders have denied.
During an unprecedented public grilling by lawmakers last month, Lee said he was unaware of Samsung's payments to Choi's foundations.
But prosecutors are accusing Lee and Samsung of making the payments to secure the National Pension Service's backing for the 2015 merger. The fund's vote was key to ensuring it went through in the face of vigorous opposition from a U.S.-based activist hedge fund.
Samsung's deepening links to the corruption investigation have done further damage to the company's image after the humiliating fiasco over its fire-prone Galaxy Note 7 smartphone last year. Results of an investigation into what caused the smartphones to catch fire are expected to be announced this month.
-- Stella Kim and Jethro Mullen contributed tot his report.
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