By Ju-min Park
SEOUL (Reuters) - 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.
The special prosecutor's office said National Pension Service Chairman Moon Hyung-pyo had acknowledged that he had pressured the fund to approve an $8 billion merger between two Samsung Group [SAGR.UL] units last year while he was head of the health ministry, reversing an earlier public denial.
Moon has been under emergency detention since early on Wednesday.
He 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.
The NPS has also denied that Moon, 60, had exerted pressure on it to approve the deal. It declined to comment on Thursday.
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.
"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 special prosecutor said it had applied to a court for a warrant to arrest Moon on charges of abuse of power and giving false testimony.
The Seoul Central District Court would hear the warrant request on Friday, it said.
Some investors criticized the merger for strengthening the founding family's control of Samsung Group, South Korea's largest "chaebol", or conglomerate, at the expense of other shareholders.
The NPS, which had 545 trillion won ($451.78 billion) under management at the end of September and was a major shareholder in the two Samsung affiliates, voted in favor of the merger without calling in an external committee that sometimes advises it on difficult votes.
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 center of the influence-peddling scandal, may have been connected to NPS support for the merger, a prosecution official told Reuters last week.
Park, 64, is accused of colluding with Choi to pressure big businesses to make contributions to non-profit foundations backing presidential initiatives.
She has denied wrongdoing but apologized for carelessness in her ties with Choi, a friend for four decades, who has also denied wrongdoing. Choi is in detention pending trial.
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.
Park's powers have been assumed by the prime minister as she awaits the court's decision, although she remains in the presidential Blue House.
Large crowds have gathered in central Seoul for the past nine Saturdays demanding that Park step down immediately, with another demonstration expected this weekend.
(Reporting by Ju-min Park; Additional reporting by Christine Kim, Hyunjoo Jin and Joyce Lee; Writing by Tony Munroe; Editing by Robert Birsel)