SEOUL (Reuters) - A South Korean special prosecution team investigating the widening influence-peddling scandal that has engulfed the presidency placed the chairman of the National Pension Service (NPS) under emergency arrest on Wednesday, it said.
The special prosecutor’s office did not provide further details immediately on the arrest of NPS Chairman Moon Hyung-pyo but had said on Monday it had 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 affiliates while he was head of the Ministry of Health and Welfare, which runs the NPS.
Arriving at the special prosecutor’s office on Tuesday, Moon said he would cooperate with prosecutors and did not elaborate when asked if he pressured the NPS to vote for the merger. On Dec. 9, the NPS called “groundless” a media report saying that Moon had pressured the NPS to support the merger.
With 545 trillion won ($451.35 billion) under management at the end of September, the NPS is the world’s third-largest pension fund and was a major shareholder in Samsung Group affiliates Cheil Industries Inc and Samsung C&T Corp when they merged last year.
The tie-up was criticised by some investors for strengthening the founding family’s control of the group, South Korea’s largest “chaebol”, or conglomerate, at the expense of other shareholders.
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 centre van at the office of the special prosecutor, escorted by guards. He declined to answer reporters’ questions.
The influence-peddling scandal led parliament to impeach President Park Geun-hye on Dec. 9, a decision that must be upheld or overturned by the Constitutional Court within 180 days. In the meantime, Park has been stripped of her powers, which have been assumed by the prime minister, although she remains in the presidential Blue House.
Investigators are also examining whether Samsung’s support for a business and foundations backed by Park’s friend, Choi Soon-sil, may have been connected to NPS support for the merger, a prosecution official told Reuters last week.
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 favour of the merger, or that it made contributions seeking something in return.
A Samsung Group spokeswoman declined further comment on Wednesday.
Park has denied wrongdoing in the scandal but apologised for carelessness in her ties with Choi, who has also denied wrongdoing.
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.
($1 = 1,200 won)
Reporting by Ju-min Park; Additional reporting by Hyunjoo Jin, Yun Hwan Chae and Christine Kim; Writing by Tony Munroe; Editing by Chris Reese, Dan Grebler and Nick Macfie