Samsung Heir Begins Testimony in His Corruption Trial

The de facto head of the Samsung conglomerate defended himself in court for the first time since his February arrest over a political scandal that has gripped South Korea and toppled its president.

Lee Jae-yong, who has been in custody since the arrest, stepped into the stand Wednesday wearing a navy-blue suit and bowed to the judges before taking a seat, pouring himself a paper cup of water and facing prosecutors’ questions.

The 49-year-old Mr. Lee–grandson of Samsung’s founder and vice chairman of Samsung Electronics Co.–had been on the sidelines during court hearings since the first one in April, when he responded to basic questions from the judge confirming his identity. He faces multiple charges, including bribery.

Along with former President Park Geun-hye, Mr. Lee is one of the highest-profile figures in the corruption scandal. The prosecutors’ case centers on some $37 million that Samsung arranged to pay to entities allegedly controlled by Choi Soon-sil, a friend of the former president. The payments include an $18.6 million equestrian agreement Samsung made with a small sports-consulting company in Germany.

For the first 10 minutes, Mr. Lee was questioned about his role at Samsung.

“About 95% of my responsibilities are with Samsung Electronics and its affiliated companies,” he said.

Prosecutors say Mr. Lee ordered his company to fund entities linked to Ms. Choi, and that in exchange Ms. Choi colluded with Ms. Park to have the country’s pension service vote in favor of a 2015 merger of two Samsung affiliates. That deal was seen as critical to consolidating Mr. Lee’s grip on Samsung Electronics Co., the world’s biggest smartphone maker.

Samsung has acknowledged making the payments, but has denied they were in exchange for political favors. Ms. Park, who was removed from office in March, and Ms. Choi have both denied wrongdoing. Mr. Lee testified Wednesday that the merger was decided by the heads of the two companies.

Mr. Lee’s defense attorneys have denied the charges in court, saying Mr. Lee didn’t seek favors from the government. They have dismissed allegations regarding Samsung’s dealings, calling them “regular business activities.”

Mr. Lee has been the de factor leader of the conglomerate since his father, Samsung chairman Lee Kun-hee, was incapacitated by a heart attack in 2014.

The “trial of the century,” as domestic media has dubbed it, has trained a spotlight on South Korea’s long history of close ties between government and business. Dozens of witnesses–including government officials, former and current athletes, bankers and the incumbent head of the country’s antitrust watchdog–have testified.

The court is expected to finish questioning defendants this week and hold its final hearing early next week. A verdict is likely before Aug. 27, the last day that Mr. Lee can be held in custody without a conviction under South Korean law.

Fox Business | Wednesday, 2 August, 2017