South Korea prosecutor seeks arrest warrant for pension fund chief

SEOUL - South Korean prosecutors investigating an influence-peddling scandal that has engulfed President Park Geun-hye said on Thursday they are seeking a warrant to arrest the head of the national pension fund, the world's third-largest.

National Pension Service (NPS) Chairman Moon Hyung-pyo acknowledged that he had pressured the fund to approve an US$8 billion (S$11.6 billion) merger between two Samsung Group units last year while he was head of the health ministry, the special prosecutor's office told a media briefing.

Moon had denied during a parliamentary hearing in November that he had exerted pressure on the NPS, which is run by the health ministry, to back the merger as a major shareholder.

The merger last year of Samsung Group affiliates Cheil Industries Inc and Samsung C&T Corp has become central to the investigation of the scandal that led parliament to vote this month to impeach Park.

The special prosecutor said it had applied to a court for a warrant to arrest Moon, who has been under emergency detention since early Wednesday, on charges of abuse of power and giving false testimony. "What we can say is former minister Moon initially denied the charge (of pressuring NPS) but acknowledged that he ordered NPS to vote for the merger at the time when he was the minister," said Lee Kyu-chul, spokesman for the special prosecution team.

Lee declined to provide further details on why Moon had ordered the NPS to support the merger.

The NPS declined to comment.

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 centre of the influence-peddling scandal, may have been connected to NPS support for the merger, a prosecution official told Reuters last week.

Park is accused of colluding with 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 apologised for carelessness in her ties with Choi, a friend for four decades, who has also denied wrongdoing.

Choi is in detention pending trial. She has also denied wrongdoing.

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.