Alison Evans, Deputy Head & Senior Analyst, Asia-Pacific Country Risk, IHS Markit
Key Points:
- South Korea’s constitutional court approved on 10 March the impeachment of President Park Geun-hye. Eight justices unanimously voted in favour for Park to be impeached.
- This decision follows the conclusion of the special prosecutor’s 120-day investigation, but precedes a second justice’s term ending on 13 March. Importantly, because of the wording of the impeachment motion, the court wanted to wait for the outcome of investigations into allegations of corruption involving Park, her long-time confidante Choi Soon-sil, and various high-level aides and business leaders.
- On 6 March special prosecutor Park Young-soo summarised his investigation’s conclusions, saying that President Park was “instrumental” in the Ministry of Culture blacklisting over 9,000 creative-industry professionals, who were apparently critical of the government. More importantly, the investigation’s findings allege that Park and Choi took bribes to facilitate the National Pension Service’s support of a merger of two Samsung Group firms in July 2015.
- Lee Jae-yong, Samsung Group’s de facto leader, was indicted on 28 February on charges of bribery and embezzlement relating to about KRW40 billion (USD34 million) allegedly paid to Choi in part through her Mir Foundation and K-Sports Foundation. However, as president, Park Geun-hye was immune to criminal prosecution except in cases of insurrection or treason.
IHS Markit Views:
Now that Park has been impeached, an election will have to be held within 60 days. At present, potential candidate Moon Jae-in is leading in polls, though he has been criticised for flip-flopping on the controversial deployment of the THAAD anti-missile system. Currently, a candidate from either the Democratic Party of Korea or the People’s Party would probably fare better than one from the Liberty Korea Party (formerly the Saenuri Party) or the former Saenuri Party’s anti-Park faction, now the Bareun Party.