SEOUL (Reuters) - South Korean prosecutors put the chairman of the world’s third-largest pension fund under emergency arrest on Wednesday in a widening influence-peddling scandal that has led to parliament voting to impeach President Park Geun-hye.
The special prosecutor’s office did not provide further details on the arrest of National Pension Service (NPS) Chairman Moon Hyung-pyo. Officers on Monday raided his home on suspicion of abuse of power.
The special prosecutor has been looking into whether Moon pressured the pension fund to support the $8 billion merger last year of two Samsung Group [SAGR.UL] affiliates while he was head of the Ministry of Health and Welfare, which runs the NPS.
Investigators are also examining whether Samsung’s support for a business and foundations backed by the president’s friend, Choi Soon-sil, who is at the center of the influence-peddling scandal, may have been connected to NPS support for the merger, a prosecution official told Reuters last week.
Moon said on Tuesday, as he arrived at the prosecutor’s office, he would cooperate and did not comment when asked if he pressured the NPS to vote for the merger.
On Dec. 9, the NPS dismissed as “groundless” a media report that Moon had coerced the NPS to support the merger.
The NPS had 545 trillion won ($451.35 billion) under management at the end of September and was a major shareholder in Samsung Group affiliates Cheil Industries Inc and Samsung C&T Corp when they merged last year.
Some investors criticized the tie-up for strengthening the founding family’s control of Samsung Group, South Korea’s largest “chaebol”, or conglomerate, at the expense of other shareholders.
The NPS voted in favor of the merger without calling in an external committee that sometimes advises it on difficult votes.
A spokeswoman for the NPS said on Wednesday it was “watching the situation” and declined to comment further.
TV footage showed Moon arriving in a detention center van at the office of the special prosecutor, escorted by guards and wearing a prison uniform. He declined to answer reporters’ questions.
Park, 64, whose father ruled the country for 18 years after seizing power in a 1961 coup, is accused of colluding with her long-time friend, Choi, who has been indicted and is in custody, to pressure big businesses to make contributions to non-profit foundations backing presidential initiatives.
Park has denied wrongdoing but apologized for carelessness in her ties with Choi, a friend for four decades, who has also denied wrongdoing. Choi is in detention pending trial.
Parliament voted to impeach Park over the scandal on Dec. 9, a decision that must be upheld or overturned by the Constitutional Court within 180 days.
In the meantime, she has been stripped of her powers, which have been assumed by the prime minister, although she remains in the presidential Blue House.
Big street protests have been held every Saturday for the last nine weeks to demand that she step down immediately. Another rally is expected this weekend.
At a parliamentary hearing this month, Samsung Group scion Jay Y. Lee denied allegations from lawmakers that Samsung lobbied to get the NPS to vote in favor of the merger, or that it made contributions seeking something in return.
A Samsung Group spokeswoman declined further comment on Wednesday.
Investigators raided NPS offices last week and in November.
Under South Korean law, a suspect can be held under emergency arrest without a warrant for up to 48 hours.
If the Constitutional Court affirms Park’s impeachment, she would be the country’s first democratically elected leader to be ousted from office, and would lose immunity from prosecution.
Her early departure from office would trigger a presidential election, to be held in 60 days.
Reporting by Ju-min Park; Additional reporting by Hyunjoo Jin, Yun Hwan Chae and Christine Kim; Writing by Tony Munroe; Editing by Robert Birsel