RACHEL MARTIN, HOST:
Dramatic developments this morning in South Korea for one of the world's biggest companies. Prosecutors have asked a court to issue an arrest warrant for the leader of Samsung. It's all in connection to this ongoing corruption scandal that led to record-sized protests and the recent impeachment of South Korea's president. NPR's Seoul correspondent Elise Hu has been covering this for us, and she joins us now on the line. Good morning, Elise.
ELISE HU, BYLINE: Good morning.
MARTIN: How is Samsung involved in all of this?
HU: Well, investigators say the head of Samsung, Jay Y. Lee, tried to curry favor with the president with payoffs. Specifically, Lee's accused of directing some $36 million U.S. in company money to two nonprofit foundations that were started by President Park Geun-hye's close friend. This was, prosecutors allege, in order to win government support of a controversial merger between two Samsung affiliates, which happened in 2015. This merger was approved, and it was actually thanks in part to support from the government's pension fund, which is a substantial shareholder. To put this into context, Rachel, if the arrest warrant does lead to an indictment, Samsung becomes the latest to take a criminal hit in South Korea's largest political scandal, really, ever.
MARTIN: OK, so what is Samsung saying about all this?
HU: This comes at a rocky time for the conglomerate. Samsung is set to release the findings on its fire-prone Galaxy Note 7 phone sometime in the next month or so. But on these specific charges, Samsung Korea says it is innocent. A spokesperson told NPR it's hard to understand the prosecutor's decision and that it won't accept the claims that there was any illegal solicitation going on regarding that 2015 merger.
MARTIN: In South Korea, just give us a sense of how big of a deal it is to charge an executive at this level from a company of this size.
HU: Good question. South Korea actually has a history of charging executives at its family-controlled conglomerates like Samsung. These companies are known in Korean as chaebol. Lee's father, the ailing Samsung chairman Lee Kun-hee, has actually been convicted twice before, once on bribery charges, another on tax evasion. But he never did jail time, and he avoided it partly because of the coziness between Korean government and business. Lee's prison terms were suspended, and his criminal records were actually erased by presidential pardons.
MARTIN: All right. So all this is connected to this presidential-level scandal. Remind us where we're at with that. Lawmakers impeached President Park in December for abusing power. But she's not been removed from office, so where are things at?
HU: Her powers have been suspended. We have an acting president that's running South Korea right now. And that's all while this impeachment trial continues, and an independent criminal investigation of the president is ongoing.
MARTIN: NPR's Elise Hu speaking to us about Samsung and the political intrigue from Seoul, South Korea. Thanks, Elise.
HU: You bet.