Asia

South Korea pension fund head arrested in scandal probe

  • 28 December 2016
  • From the section Asia
Moon Hyung-pyo arrives at prosecutors' offices in Seoul, South Korea on 27 December 2016. Image copyright AP
Image caption The investigation is examining any role Mr Moon had in backing a Samsung merger

South Korea's pension fund head has been arrested in a probe into alleged corruption involving electronic firm Samsung and the country's president.

Special prosecutors said they raided National Pension Service (NPS) chairman Moon Hyung-pyo's home on Monday, before arresting him on Wednesday.

The NPS is the world's third-largest pension scheme.

It comes amid President Park Geun-hye's impeachment over the scandal involving her longstanding mentor Choi Soon-sil.

In the latest arrest, investigators are looking into NPS's support of an $8bn (£6.5bn) merger between two Samsung Group affiliates and whether Mr Moon used his influence as health minister at the time, to pressure it to back the deal.

The Ministry of Health and Welfare runs the pension service, which manages 545 trillion won ($451bn; £367bn) and was a major shareholder in Cheil Industries Inc and Samsung C&T Corp when they merged.

The NPS has denied previous reports that Mr Moon pressured the organisation to back the deal, and Mr Moon told reporters on Tuesday that he would cooperate with the investigation.

Image copyright EPA
Image caption Santa has not brought much cheer to President Park and her allies this year

The scandal has also caught Samsung up in allegations that it backed foundations controlled by Choi Soon-sil in the hope of receiving political favours, which investigators are also examining.

Politicians voted on 9 December to impeach President Park - a decision South Korea's constitutional court has six months to uphold or overturn. Until then she remains formally president but stripped of her powers, which are handed to the prime minister, a presidential appointee.

Ms Park denies wrongdoing but has apologised for the way she managed her relationship with Ms Choi, who also denies committing criminal offences.

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