Samsung boss faces arrest again
South Korean prosecutors filed an arrest warrant on Thursday against Samsung’s de facto leader for breaking local capital market laws.
The authorities accused Samsung Electronics vice chairman Lee Jae-yong of committing fraudulent transactions, stock price manipulation, and accounting fraud during the merger of Samsung C&T and Cheil Industries back in 2015.
Arrest warrants were also filed for two key executives, vice chairman Choi Gee-sung and president Kim Jong-joong, of the now-defunct Future Strategy Office, the management unit of the entire conglomerate. Kim also faces an additional charge of perjury.
Prosecutors believe Samsung intentionally inflated the stock price of Cheil Industries, in which Lee had a 23.2% stake, and undervalued those of Samsung C&T, the de facto holding company of the entire business group in which he had no shares.
The merger allegedly allowed Lee to accrue more shares of the now merged Samsung C&T, thereby giving him more control over the entire Samsung business group, prosecutors said.
Lee reportedly denied all charges during two instances of questioning by investigators last month.
Samsung has declined to comment on the matter.
In a statement, Lee’s legal team said the prosecutors’ decision was “regrettable” given that he requested a public assessment of the validity of the indictment on Tuesday.
Since 2018, South Korea has allowed the formation of a civil panel to review cases. The panel, comprised of randomly chosen experts, undertakes reviews of ongoing investigations and assesses whether indictments should proceed. Their decisions are not legally binding, however.
This investigation is separate to Lee’s bribery trial, where he has admitted to paying bribes to former President Park Geun-hye and her key aide for their support of a separate merger.
While the court review date for the new arrest warrants has yet to be announced, Lee is still facing a retrial for the bribery scandal.
He was first arrested for the bribery charges back in 2017 before being released in 2018 after he received a suspended sentence in the appellate court. The Supreme Court ordered for a retrial last year, however, saying that some of the bribery charges were wrongly dismissed.
Meanwhile, last month, Lee made a televised address to apologise for the conglomerate’s involvement in the ongoing national bribery scandal, admitting that the charges of unethical activities were caused by a “succession problem”. During the address, Lee also promised such activities have been put to rest and that he would not pass over the conglomerate to his children.