South Korea pension fund head arrested in scandal probe

File picture of protesters wearing cut-out of South Korean President Park Geun-hye (right) and Choi Soon-sil attend a protest denouncing President Park Geun-hye over a recent influence-peddling scandal in central Seoul October 27, 2016.

On Monday, Hong was summoned for questioning by the independent counsel that is looking into the corruption scandal involving President Park Geun-hye and her longtime friend Choi Soon-sil.

The special investigative team suspects that Moon had pressured the NPS on instructions from former presidential aides An Chong-bum and Jeong Ho-seong.

A special prosecutor has been investigating whether Samsung bribed Park's confidant, Choi Soon-Sil, to win state approval for a controversial merger of two of its units in July a year ago.

Hong Wan-sun, a former head of the asset management division of the National Pension Service (NPS), is reported to have admitted to the allegation that the government pressured the NPS to approve a major deal between two affiliates of Samsung Group a year ago.

Korean prosecutors would now have to decide whether to formally place Moon under detention before the emergency arrest period expires in 48 hours.

The controversial merger helped Samsung Electronics Vice Chairman Lee Jae-yong and his family, who had had a 42.2 percent stake of Cheil, gain a 30 percent stake of Samsung Group's de facto holding firm Samsung C&T.

During the investigation, Hong reportedly recanted his earlier testimony and said he was pressured by a senior official of the Welfare Ministry to back the deal. The president, Samsung, and NPS all could face bribery charges upon the findings.

The special prosecutor - appointed by lawmakers - has taken the case over from state prosecutors.

  • Latoya Cobb