South Koreas National Pension Service chief admitted to pressuring the state-run fund to back a controversial merger of two Samsung units, prosecutors said Thursday during a widening probe into a corruption scandal engulfing impeached President Park Geun-Hye.
Park is accused of colluding with long-time confidant Choi Soon-Sil to strong-arm companies like Samsung into handing over tens of millions of dollars to dubious foundations which Choi controlled.
As part of the investigation, a team of special prosecutors has been looking into whether Samsung bribed Choi to win state approval for the merger of two of its units in July last year.
Former health minister Moon Hyung-Pyo -- now National Pension Service (NPS) chief -- was taken into emergency detention Wednesday on allegations that he pressured the fund to vote in favour of the merger when he served in the health ministry.
"He admitted that he gave such orders," Special Prosecutors' Office spokesman Hong Jung-Seok said.
Hong said prosecutors have applied for a warrant to formally arrest Moon for abuse of power and giving false testimony. At a parliamentary hearing in November, Moon had denied any involvement in the merger.
The merger of Samsung units Cheil Industries and Samsung C&T last year was seen as a crucial step to ensure a smooth father-to-son power transfer to Lee Jae-Yong, scion of Samsung's founding family.
Critics said it undervalued Samsung C&T stock but NPS -- the world's third largest public pension fund and a major Samsung shareholder -- backed the deal, allegedly incurring hundreds of millions of dollars in losses for NPS subscribers.
Choi has been formally indicted on charges of abuse of power and coercion.
Parliament voted to impeach Park on December 9, accusing her of constitutional and criminal violations ranging from a failure to protect people's lives to bribery and abuse of power.
The case is now being considered by the Constitutional Court which was given 180 days to rule on the validity of the impeachment.
The first hearing for Park's impeachment is scheduled for next Tuesday.