Samsung chief appears for second round of questions in graft probe
Samsung Group leader Jay Y. Lee appeared at the South Korean special prosecutor's office
for questioning on Monday as part of a wider investigation into an influence-peddling scandal
that could topple President Park Geun-hye.
The special prosecutor has focused on South Korea's biggest conglomerate, accusing Lee
in his capacity as Samsung chief of pledging 43 billion won ($37.31 million) to a business
and organizations backed by Park's friend, Choi Soon-sil, in exchange for support for
a 2015 merger of two Samsung companies.
The funding included sponsorship for the equestrian career of Choi's daughter, who is under arrest
in Denmark after being sought by South Korean authorities.
Park, Lee, Choi, and Samsung Group [SAGR.UL] have all denied bribery accusations.
Proving illicit dealings between Park or her confidantes and Samsung Group is critical
for the special prosecutor's case that ultimately targets Park, analysts have said.
Park was impeached by parliament in December and South Korea's Constitutional Court will
decide whether to uphold that decision.
She has been stripped of her powers in the meantime.
Lee arrived at the prosecution office in southern Seoul early on Monday in a black sedan, dressed
in a dark blue suit and tie and flanked by Samsung Group officials and his lawyer.
"I will once again tell the truth to the special prosecution," Samsung Group's third-generation
leader told reporters before entering an elevator.
He gave no details.
Outside the prosecutor's office, protesters held up signs calling for his arrest.
EXECUTIVES QUESTIONED
The special prosecution team said investigators were questioning two other Samsung executives
as suspects.
Both are officers of the Korea Equestrian Federation and have been questioned previously
in the case.
One of those two, Samsung Electronics Co Ltd president Park Sang-jin, did not respond to
reporters on his arrival at the special prosecution team's office.
Lee Kyu-chul, spokesman for the special prosecution office, told a news briefing the office would
decide soon whether to make a second arrest warrant request for the Samsung Group chief.
He did not comment on other details, including what Jay Y. Lee, 48, during Monday's questioning.
Spokesman Lee said prosecutors would also consider whether to seek arrest warrants for
four other Samsung Group executives identified as suspects.
The prosecutor's office had previously said it would not seek arrests for any Samsung
executives other than Jay Y. Lee.
In January, the special prosecution sought a warrant to arrest Samsung chief Lee after
questioning him for more than 22 hours, accusing him of paying bribes to win the state pension
fund's support for the controversial merger of Samsung C&T Corp (028260.KS) and Cheil
Industries Inc.
However, a Seoul court rejected that request.
Chang Choong-ki, deputy head of Samsung Group's corporate strategy office, known informally
as its "control tower", was also questioned as a suspect on Sunday and returned home hours
later.
Shares in Samsung Electronics were down 0.9 percent by 0600 GMT on Monday, compared with
a flat wider market .KS11.
"The issue will have limited impact on share prices, except if the worst-case scenario
happens, since political issues previously did not have a big influence on share prices
or earnings," said Bae Sung-young, a stock analyst at Hyundai Securities.
Netanyahu opposes Palestinian state, Israeli minister says ahead of U.S. visit
Benjamin Netanyahu opposes a Palestinian state, a senior Israeli cabinet member said on Monday,
but left it unclear whether the prime minister would say that publicly in talks with U.S.
President Donald Trump in Washington this week.
Netanyahu has never explicitly abandoned his conditional support for a future Palestine,
and his spokesman did not respond immediately to a request to comment on Public Security
Minister Gilad Erdan's remarks.
Erdan belongs to Netanyahu's right-wing Likud party, whose leading members have often espoused
a harder line than the prime minister himself.
"I think all members of the security cabinet, and foremost the prime minister, oppose a
Palestinian state," Erdan told Army Radio after the forum met on Sunday on the eve of
Netanyahu's departure for Washington for talks with Trump on Wednesday.
"No one thinks in the next few years that a Palestinian state is something that, God
forbid, might or should happen," he said in the interview.
But asked if Netanyahu would voice opposition to statehood on camera when he meets Trump,
Erdan said: "The prime minister has to weigh things according to what he feels in the meeting
and the positions he encounters there.
No one knows what the positions of the president and his staff are."
Palestinians seek to establish a state in the occupied West Bank and the Gaza Strip
with East Jerusalem as its capital.
Israel captured those areas in a 1967 war and pulled its troops and settlers out of
Gaza in 2005.
NUANCED
Citing Israeli settlement activity, Palestinian leaders and the former U.S. administration
of Barack Obama have questioned Netanyahu's commitment, which he first made in a 2009
policy speech, to the so-called two-state solution to decades of conflict.
"It is not only their statements - what the government of the extreme right in Israel
does on the ground prevents any chance of the establishment of a Palestinian state,"
Wasel Abu Youssef, an official of the Palestine Liberation Organization, said of Erdan's comments.
Since Trump took office last month, Netanyahu has approved construction of 6,000 settler
homes in the West Bank and East Jerusalem, drawing international condemnation which the
White House did not join.
In recent days, however, the Trump administration has taken a more nuanced position, saying
building new settlements or expanding existing ones may not be helpful in achieving peace.
Netanyahu has spelled out terms for a future Palestine: its demilitarization, the stationing
of Israeli troops in its territory and Palestinian recognition of Israel as the "nation-state"
of the Jewish people.
Last month, Israel's Haaretz newspaper said Netanyahu, in a closed-door meeting with Likud
ministers, coined a new term "Palestinian state-minus" to describe his vision of limited
Palestinian sovereignty.
Under interim peace deals, Palestinians, who number about 2.5 million in the West Bank,
currently exercise limited self-rule in the territory, where some 350,000 Israeli settlers
live.
Some members of Netanyahu's government have called for the annexation of parts of the
West Bank, a demand he has resisted.
'Trump trades' on boost to economic growth come back with a bang
World stocks and bond yields rose on Monday, lifted by a re-emergence of so-called "Trump
trades" as investors bet that the U.S. president's tax reform plans will boost economic growth
and corporate profits.
Following on from Friday's record high closes on Wall Street, Asian stocks rallied to 1-1/2-year
peaks and European stocks rose for the fifth consecutive session on Monday, their longest
winning stretch for two months.
The Japanese yen was the biggest underperformer among major currencies, as is typical when
riskier assets like stocks are doing well.
Investors were also comforted by the two-day U.S.-Japan summit held over the weekend apparently
having ended smoothly without President Donald Trump talking tough on trade, currency and
security issues.
"Markets have continued Friday's upbeat theme," said Kathleen Brooks, research director at
City Index in London, noting that the VIX measure of U.S. stock market volatility closed
last week below 11 for the third week in a row.
The last time this happened was over a decade ago.
"This is another sign that, for now, the Trump trade is still on.
It also suggests that even with the controversy Trump has caused since he took office, financial
markets are still willing to give him the benefit of the doubt," Brooks said.
Europe's benchmark index of leading 300 shares was up 0.3 percent at 1453 points, lifted
by the mining and basic resources sectors.
Basic resources rose 2.5 percent to their highest since August 2014.
Germany's DAX was up 0.4 percent, led by a 15 percent rise in drugmaker Stada after the
company said it had received two offers for the acquisition of the company, one of which
is private equity group Cinven Partners LLP.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 percent, with resource-related
stocks again the driving force, while Japan's Nikkei rose 0.4 percent.
U.S. futures pointed to a higher open on Wall Street.
The S&P 500, Dow Jones Industrials and Nasdaq Composite all posted record closing highs
on Friday.
CONFORMITY
Comments from Trump on Thursday that he plans to announce what he said would be the most
ambitious tax reform plan since the Reagan era in the next few weeks rekindled hopes
for big tax cuts.
Economic data from major economies has also been upbeat, including Friday's Chinese trade
figures, while U.S. corporate earnings have been also solid so far.
In the weekend meeting with Japanese Prime Minister Shinzo Abe, Trump held off from repeating
harsh rhetoric that accused Japan of taking advantage of U.S. security aid, stealing American
jobs and "playing money markets."
Nor were currency issues discussed.
"The U.S. president has shown further signs of conformity in U.S. foreign policy during
his weekend summit with Japan's prime minister Abe," Rabobank analysts said in a note on
Monday.
Those apparently cordial discussions drove the dollar as much as 0.9 percent higher against
the yen to 114.17 yen.
It last stood at 113.65 yen, up 0.4 percent on the day and extending its rebound from
a 10-week low of 111.59 yen touched last week.
Figures on Monday showed that Japan's economy grew for a fourth straight quarter in the
final three months of last year as a weaker yen supported exports, but doubts over the
sustainability of the recovery persisted.
The euro's rise of 0.5 percent against the yen to 121.00 yen, helped lift the European
currency slightly against the dollar.
The euro was last up 0.1 percent at $1.0650, inching further away from Friday's three-week
low of $1.0608.
The euro has been dogged by fears about a strong showing for French far-right leader
Marine Le Pen ahead of a presidential election.
Ten-year U.S. Treasury yields rose 3 basis points to 2.44 percent.
In commodities, copper hit its highest levels since May 2015 after shipments were shut off
from the world's two biggest copper mines - due to a strike in Chile and an export's
ban by Indonesia.
It last traded at $6,129 per tonne, up 0.7 percent on the day.
On Friday it jumped more than 4 percent, its biggest one-day rise in almost four years.
Oil prices dipped slightly after strong gains on Friday on reports that OPEC members delivered
more than 90 percent of the output cuts they pledged
in a landmark deal that took effect in January.
International benchmark Brent crude futures fell 0.8 percent to $56.25 per barrel.
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