South Korea President Park Impeached Over Corruption Scandal (2)

(Bloomberg) -- South Korean President Park Geun-hye was impeached by parliament Friday over an influence-peddling scandal that has shaken Asia’s fourth-largest economy and fueled public anger over ties between politicians and businesses.

Less than two months since Park made her first apology for involving a friend in state affairs, 234 lawmakers -- more than the required two-thirds of members in the National Assembly -- voted for impeaching her while 56 opposed it. The vote came after some of the biggest street protests since the nation became a democracy in 1987.

Thousands of people, some holding banners, outside parliament cheered at the news. Ahn Cheol-soo of the opposition People’s Party called for the launching of a group of both government officials and legislators to discuss state affairs. Park was planning an “informal” meeting with Cabinet members at 5 p.m., her office said by a text message.

Park will now be suspended from power with Prime Minister Hwang Kyo-ahn taking over as interim leader until the constitutional court rules on the motion within 180 days. Hwang will address the nation at 8 p.m. Friday, Yonhap News said. If the court agrees to remove her from power, a special presidential election will follow in 60 days.

“It is a matter of time before Park loses her influence within her party,” said Lee Jae-mook, who teaches political science at Hankuk University of Foreign Studies in Seoul. “The situation will now move in a direction that favors the opposition, which got what it wanted.”

Read here about why Park faced an impeachment vote

National Assembly speaker Chung Sye-kyun said after the result that officials must stay focused while Park is suspended from power. Consumer confidence has tanked to the lowest in years, hurting an economy already struggling with slowing exports. Hundreds of thousands of people have held weekend rallies across the nation to demand her arrest while Park has refused to step down and contended she did not seek any personal gain.

The impeachment bill will now be moved to the constitutional court for a review by nine justices. Affirmative votes from six of them are required for the motion to be cleared, which will force Park to lose her presidential immunity to prosecution.

Impeachment “is a good event for Korean markets,” said Huh Nam-kwon, chief investment officer at Shinyoung Asset Management. “The ties between chaebol and politics will be disconnected, improving corporate governance. Whether the next president is elected from the ruling party or opposition, he or she will likely prefer a fiscal policy to boost the sluggish economy.”

Read about how economists see impeachment as positive for South Korea

Park’s longtime friend Choi Soon-sil is suspected to have used her relationship with the president to pressure top businesses including Samsung Electronics Co. and Hyundai Motor Co. to donate tens of millions of dollars to two foundations controlled by Choi. The president’s friend is also suspected to have meddled extensively in state affairs.

“Anything could happen today or up to the next six months or for the next year,” David Kang, a professor of international relations and business at the University of Southern California, said on Bloomberg TV before the vote. “Particularly because so many of the major Korean companies have been implicated in this scandal, we’re in totally uncharted territory."

Apologies

The allegations prompted mass candlelit rallies on the streets of Seoul and other large cities every weekend to demand Park’s ouster and arrest. She has made three apologies to the nation while blaming her associates for the scandal.

At parliamentary hearings this week, the heads of companies that made donations denied they sought political favors in return. Some of them, including GS Group chairman Huh Chang-soo, told lawmakers that it was hard to refuse a government request for donation.

Park said this week she was “ready” to face the vote and accept the ruling of the constitution court. She had earlier said she was willing to resign in April to pave the way for an election in June, an offer rejected by not only opposition but also a faction within the ruling Saenuri party.

(Updates with Park plan for meeting in third paragraph, analyst comments in fourth and seventh paragraphs.)

--With assistance from Jaehyun Eom Jung Soo Maeng Jiyeun Lee Hooyeon Kim Heejin Kim and Sohee Kim To contact the reporter on this story: Kanga Kong in Seoul at kkong50@bloomberg.net. To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Andy Sharp

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