SEOUL – South Korea’s special prosecutor’s office said on Monday it was seeking a warrant to arrest the head of Samsung Group, the country’s largest conglomerate, accusing him of paying multi-million dollar bribes to a friend of President Park Geun-hye.

Samsung Group chief Jay Y. Lee was questioned for 22 straight hours last week as investigators probed a corruption scandal that resulted in parliament impeaching Park last month.

The special prosecutor’s office accused Lee of paying bribes totalling 43 billion won (S$52 million) Choi Soon-sil, a friend of the president who is the woman at the centre of scandal.

Lee was also accused of embezzlement and perjury in the prosecution’s application for an arrest warrant.

South Korean conglomerate Samsung Group said on Monday it could not accept the special prosecutors’ accusations that its leader, Jay Y. Lee, paid bribes to further his succession or the merger of two affiliates in 2015. “It is difficult to understand the special prosecution’s decision,” Samsung Group said in an email statement in response to the special prosecutors’ decision to request an arrest warrant for Lee, the third-generation leader of South Korea’s top conglomerate.

The prosecutors also said in their indictment of National Pension Service (NPS) chief Moon Hyung-pyo that he received an order from President Park Geun-hye to help the 2015 merger of Samsung C&T Corp and Cheil Industries Inc succeed.

Moon was indicted on charges of abuse of power and giving false testimony. He was arrested in December after acknowledging ordering the world’s third-largest pension fund to support the $8 billion merger last year of two Samsung Group affiliates while he was head of the health ministry, which oversees the NPS.

Seoul’s central district court said a hearing will be held at 10:30 a.m. (0130 GMT) on Wednesday to decide whether to approve the warrant. “The special prosecutor’s office, in making this decision to seek an arrest warrant, determined that while the country’s economic conditions are important, upholding justice takes precedence,” Lee Kyu-chul, a spokesman for the office, told a media briefing.

Prosecutors have been looking into whether Samsung’s support for a business and foundations backed by Park’s friend Choi may have been connected to the National Pension Service’s 2015 decision to support a controversial $8 billion merger of two Samsung Group affiliates.

NPS chairman Moon Hyung-pyo was indicted on Monday on charges of abuse of power and giving false testimony.

Park remains in office but has been stripped of her powers while the Constitutional Court decides whether to make her the country’s first democratically elected leader to be forced from office.

Moon was arrested in December after acknowledging ordering the world’s third-largest pension fund to support the $8 billion merger in 2015 while he was head of the health ministry, which oversees the NPS.

Samsung has acknowledged providing funds to the three institutions but has repeatedly denied accusations of lobbying to push through the merger.

Choi is accused of colluding with Park to pressure big businesses, including Samsung, to contribute to non-profit foundations backing the president’s initiatives.

Choi, in detention and on trial on charges of abuse of power and attempted fraud, again denied wrongdoing on Monday in an appearance at the Constitutional Court.

She also denied having any prior knowledge of the Samsung Group’s controversial 2015 merger of two affiliates. “Even if I knew, I could not have passed on any information because I have no knowledge about mergers or hedge funds, anything like that, in the first place,” Choi told the court.

South Korea has been gripped by political crisis for months, with Park impeached in December. Park has also denied wrongdoing, though admitted carelessness in her relationship with Choi.

If the impeachment is upheld by the Constitutional Court, an election would be held in two months, with former UN Secretary General Ban Ki-moon expected to be a candidate.

Shares in group flagship Samsung Electronics, the world’s top maker of smartphones, flatscreen TVs and memory chips, extended losses on Monday afternoon and were down 2.3 per cent.

The Philippines officially kicked off its chairmanship of ASEAN yesterday, with a pledge to stick to the group’s core values as it seeks to weather new challenges amid a rising China, uncertainties in the United States and threats to European unity.

“The Philippines, as ASEAN chair, will remain steadfast in upholding the ideals and values we hold dear and working for the realisation of our aspirations,” President Rodrigo Duterte said, as he led the launch ceremony in his southern home city of Davao.

He urged ASEAN’s 10 member states to “renew their dedication to the valued purposes and principles stated in the Treaty of Amity and Cooperation, including non- interference, in promoting regional peace and stability through abiding respect for the rule of law”.

Read Also: Duterte orders armed forces: Bomb Abu Sayyaf bandits, even with civilians

“Now more than ever, it is time for a change through constructive engagements,” he said.

The Philippines is assuming chairmanship of ASEAN as China expands its footprint in South-east Asia.

China has dredged reefs and sand to build at least seven islands with military-grade runways and fortifications to cement its vast claims over the South China Sea.

It also looms large in the economies of South-east Asia.

Under its former president Benigno Aquino, the Philippines had led efforts within ASEAN to push back against China.

But Mr Duterte has upended that policy, opting instead to rebuild ties with Beijing, as he pivots away from the US, the nation’s traditional ally, over criticisms of his controversial anti-crime drive.

Read Also: Opposition: If Duterte is winning war on drugs, why martial law?

Mr Duterte is determined not to antagonise China during the Philippines’ chairmanship of ASEAN.

China’s claims to three-fourths of this waterway, through which US$11 trillion (S$15.7 trillion) worth of trade passes each year, overlap with those of four ASEAN member states: the Philippines, Vietnam, Malaysia and Brunei.

The Philippines, however, will not bring to any ASEAN forum a ruling it won from an international tribunal striking down China’s claims.

“We are not going to raise this issue. There is really no useful benefit,” said Foreign Secretary Perfecto Yasay.

Analysts say the Philippines is giving up leverage, as ASEAN chair, to get China to sit down and deal with ASEAN as an equal.

“At the end of the day, there will be no protest if China does something. The overall effort right now is to be in line with China’s position, which then will cause a problem with the unity of ASEAN,” said defence analyst Jose Antonio Custodio.

Read Also: Duterte urge big powers not to meddle in ASEAN

Outside the South China Sea dispute, Mr Duterte is setting priorities in areas where ASEAN has already reached a broad consensus: health and nutrition; social protection of women, the elderly and disabled; focus on small and medium-sized enterprises; and sharing of resources in dealing with natural calamities and climate change.

Mr Duterte is also bringing his war on crime to ASEAN.

Read Also: Philippines’ Duterte says he may impose martial law if drug problem “virulent”

“The Philippines, during its chairmanship of ASEAN, will pursue concentrated efforts in combating illicit drugs. As chair, we will be primarily guided by our leaders’ affirmation… to their commitment to a zero-tolerance approach in realising a vision of a drug-free ASEAN,” said Mr Yasay.

Mr Yasay said the Philippines will also push to combat the rise of radicalism, piracy and kidnapping.

rdancel@sph.com.sg

This article was first published on January 16, 2017.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

A recent mix-up over tax refunds has highlighted the Thai government’s struggle to ignite interest in its new electronic payment system, which has been bogged down by data privacy concerns since its inception last year.

The system, called PromptPay, involves linking bank accounts to mobile phone or national identity (ID) card numbers, which are used as reference points for money transfers.

Someone wanting to receive funds from a third party would not need to use his bank account number, and would theoretically be more inclined to rely on electronic transactions rather than cash.

It is part of a larger long-term plan to lower banking costs and increase the efficiency of tax collection.

But the pace of sign-ups has been slow since registration opened last July, despite aggressive promotion by Thai banks.

While the Bank of Thailand (BOT) did not answer The Straits Times’ queries by press time, a recent Bangkok Post report said that about 18 million mobile phone or ID card numbers have been registered on PromptPay.

This is a modest fraction of all savings accounts, which numbered 78.5 million nationwide as of November last year, according to BOT statistics.

The Thai government, in a bid to accelerate registrations, has used the system to make direct payments to citizens, such as aid to the poor.

But it was recently accused of misleading taxpayers who were promised fast tax refunds via PromptPay, only to be left waiting.

One of PromptPay’s biggest draws was the planned roll-out of direct customer-to-customer inter-bank transfers.

Users would not have to pay a fee for inter-bank transfers of less than 5,000 baht (S$201).

Experts cited the existing 25-baht charge as a hindrance to the growth of electronic banking.

“People prefer taking out cash from the ATM of one bank and depositing it at the adjacent branch of another bank,” TMB Bank’s chief economist Benjarong Suwankiri told The Straits Times.

This is not just inefficient but also expensive, since it costs a bank 60 baht in overheads each time there is a physical withdrawal or deposit of cash, he said.

According to BOT statistics, two-thirds of retail inter-bank fund transfers were made via ATMs and over the counter in 2015.

Still, the launch of consumer-to-consumer transfers via PromptPay was delayed from October last year to an unspecified date in the first quarter of this year.

Since customers already give banks their ID card and mobile phone numberswhen setting up new accounts, most experts say the PromptPay system is technically no less secure than current banking options.

“The bigger problem is (the lack of) trust in data privacy,” says Mr Dhiraphol Suwanprateep, a lawyer at Baker McKenzie specialising in information technology.

As the country has yet to enact a data privacy law, users are uncertain as to whether registering for the system would increase their chances of having their personal information shared against their will.

The proportion of inter-bank transfers made by Internet or mobile banking – which grew from 10 per cent in 2010 to 33 per cent in 2015 – could expand much faster once data privacy concerns are addressed, experts said.

For now, many who have signed up for PromptPay are still waiting for opportunities to try it out.

Mr Dhiraphol signed up as soon as it was launched last year.

“I still haven’t made any transactions with it,” he said.

tanhy@sph.com.sg

This article was first published on January 16, 2017.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

As the Indian government urges millions to embrace digital payment systems, concerns over cyber security are growing due to a spate of high-profile hacking and cyber- security incidents.

Following his decision in November to demonetise high-value currency notes of 1,000 rupees (S$21) and 500 rupees to curb corruption and illegal activities, Prime Minister Narendra Modi has been pushing for cashless transactions to promote more transparency.

He launched BHIM (Bharat Interface for Money), an app for cashless transactions, and his government has announced a raft of incentives including discounts of up to 10 per cent for the purchase of petrol, diesel and insurance products by card.

Yet cyber-security experts said going digital must go hand in hand with stronger legislation, more protection for consumers and more resources to fight cybercrimes.

In November, 73 State Bank of India cardholders reported fraudulent withdrawals of around 3.9 million rupees following a data breach at the bank’s ATMs.

The bank, according to the government, blocked 600,000 cards.

This was preceded by the country’s biggest cyber-security breach last October in which multiple banks asked customers to change security codes for more than 3.25 million debit cards, including those on Visa and MasterCard platforms, amid concerns that the card data could have been stolen.

“After demonetisation and cashless economy, cyber security is becoming even more relevant,” said Mr Pawan Duggal, a cyber-law advocate.

“India is thoroughly unprepared to deal with cyber security because, number one, India does not have a dedicated cyber-security law,” he added.

India has an Information Technology Act 2000 where the maximum punishment for cyber terrorism is life imprisonment while cybercrimes like hacking may be punished by up to three years’ jail.

“Various state and non-state actors across the world are increasingly watching India’s progress and targeting Indian networks and government websites. It is a wake-up call to work consistently on cyber security,” said Mr Duggal.

Cybercrimes have been on the rise in India, which has more than 400 million Internet users, and 25 million users are added every year.

In 2015, 11,592 cybercrime cases were reported across India, compared with 453 in 2006, according to data released by the National Crime Records Bureau.

According to a Symantec report in 2015, India ranked third highest for ransomware attacks in Asia. In such attacks, hackers plant malicious software that blocks access to files until a sum of money is paid .

“In recent times, Indian banks have been targeted, so there is a certain amount of concern in the minds of people. Is my data safe? From that point of view, India needs to ensure things are in place,” said Dr Ajey Lele of the Institute for Defence Studies and Analyses, a Delhi-based think-tank.

“A structure (to combat cybercrimes) is in place but, looking at recent attacks, it is an evolving threat. One has to stay vigilant,” he said.

Worries over online crimes have been reinforced by recent high-profile hacking cases.

Hackers on Jan 1 defaced the official website of the National Security Guard, an Indian special forces unit, and left derogatory messages targeting Mr Modi.

The authorities suspect the hacking originated from Pakistan.

This follows the hacking last month of the Twitter accounts of Congress vice-president Rahul Gandhi and the party by a group called Legion.

The government has acknowledged that much needs to be done to ensure digital security.

Last Wednesday, Information Technology Minister Ravi Shankar Prasad invited Google to join government efforts to boost cyber- security systems.

Last month, IBM launched a cyber-security command centre in Bengaluru to offer security solutions to Indian companies while Cisco announced plans to open a new security operations centre in Pune.

“The more digital India becomes, there would be challenges,” said Mr Prasad at an event.

“We have taken a lot of initiatives, but there has to be greater strengthening of the IT walls,” he said.

• 453 CYBERCRIME CASES REPORTED IN INDIA IN 2006
• 11,592 CYBERCRIME CASES REPORTED IN 2015
• 400m INTERNET USERS IN INDIA
• 25m INTERNET USERS ADDED EVERY YEAR

gnirmala@sph.com.sg

This article was first published on January 16, 2017.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

The giant sinkhole that opened up at a major intersection in Fukuoka, Japan last year was shocking, but there appears to be at least one unexpected beneficiary from the incident: the 7-Eleven store next to it.

The “unsinkable convenience store” has reportedly seen a dramatic increase in its business, with students flocking to the store in the belief that it might bring them good fortune.

According to RocketNews24, students have been thronging the store to buy Kit Kat bars, which is a popular good luck charm because its name sounds like “kitto katsu”, meaning “surely win” in Japanese.

“This place appeared blessed by the gods of perseverance. And even if students didn’t really believe it, how could it hurt to buy a piece of that sacred spot?” the Japanese news blog wrote, adding that the students hoped to get protection in their time of need.

In fact, a sign has been put up at the store informing customers that an assortment of Kit Kat flavours are now available.

The store had to close temporarily after the massive sinkhole opened and swallowed the five-lane road in front of it on Nov 8 last year.

The hole, which was apparently caused by nearby subway construction, measured 15 meters deep, about 27 meters wide and about 30 meters long, according to The Japan News.

No one was injured in the incident.

The street was re-opened just one week later, with the efforts of the workers who toiled around the clock to repair the sinkhole attracting widespread praise and worldwide attention.

However, Reuters subsequently reported that the road was once again closed later in November when the newly paved road showed signs of sinking again.

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Photo Gallery

Giant sinkhole swallows up busy road intersection in Japan’s Fukuoka city

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Reuters

AFP

The Japan News/ANN

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seanyap@sph.com.sg

HONG KONG – An appeal bid by two anti-China lawmakers against their disqualification from Hong Kong’s parliament was rejected Monday, as the activists declared “war” on the authorities.

Baggio Leung and Yau Wai-ching are part of a new movement calling for semi-autonomous Hong Kong to split from China as concerns grow that Beijing is cracking down on freedoms in the city.

The pair deliberately misread their oaths of office, inserted expletives and draped themselves with “Hong Kong is not China” flags during a swearing-in ceremony in October.

They were then disqualified from retaking their oaths by Hong Kong’s high court, after an intervention by Beijing.

Hong Kong’s court of appeal rejected an attempt to overthrow the disqualification in November. On Monday it also rejected their bid seeking leave to take their case to the city’s court of final appeal – Hong Kong’s highest court.

Speaking outside the court, Leung, 30, told reporters: “This is the beginning of a war.” Justice Maggie Poon based her Monday ruling on a special “interpretation” of the city’s constitution by Beijing in November that effectively prevented Yau and Baggio from taking up their seats because of the way they took the oath.

The latest judgment said Beijing’s interpretation was “binding on the courts” in Hong Kong with the local and national systems “being within one country”.

An appeal would only be granted if it had “reasonable prospects of success” even if the case was of great public interest, the ruling said.

The court also ordered the pair to pay costs of HK$167,851 ($21,600) each.

Leung said the pair would continue to push their case. Under Hong Kong law, they can seek a hearing directly with the court of final appeal, without leave from the lower courts.

The independence movement has started to gain traction since the failure of mass pro-democracy rallies in 2014 to win political reform.

Leung and Yau were voted into parliament in citywide polls in September which saw several rebel candidates take seats for the first time, advocating either independence or self-determination for Hong Kong.

The Hong Kong government has launched a legal bid to unseat four more elected lawmakers, sparking protests and accusations from the opposition camp that they are being subjected to a witch hunt.

The four are not stridently pro-independence, but among them high-profile pro-democracy activist Nathan Law and teacher Lau Siu-lai have advocated self-determination for Hong Kong.