TOPLINE
Samsung Group vice chairman and its de facto head, Jay Y. Lee, has been indicted by South Korean prosecutors on suspicion of accounting fraud and stock price manipulation in connection with a 2015 merger, potentially setting up a protracted legal battle for Lee.
KEY FACTS
The Seoul Central District Prosecutors’ Office indicted 11 people including Lee and former Samsung executives on charges including violation of capital market laws, audit laws, along with breach of duty, which Lee’s lawyers deny.
The indictment goes against the recommendation offered by a 14-member civil panel last week which had voted 13-0 in favor of Lee, opposing an indictment.
The trial could add to the South Korean conglomerate’s legal woes, with Bloomberg News noting that a trial may take 18 months and could stretch another two years if the case is ultimately decided by the country’s top court.
The capital markets law violations could lead to five years of jail time if a court finds the amount the defendant unlawfully gained or avoided losing is 5 billion won ($4.22 million) or more.
The prosecutors are probing the $8 billion merger of the group’s affiliates Samsung C&T Corp and Cheil Industries in 2015, which was seen as a way for Lee to expand his control over the group while being against the best interest of minority investors.
Lee has previously served jail time in relation to a corruption and bribery scandal that involved the government of former President Park Geun-Hye.
Key Background
The 52-year old Lee had been embroiled in other legal scandals including one that led to the impeachment of Park. In 2017, Lee was indicted by special prosecutors on charges of bribery and corruption, accused of giving horses and other payments to a close confidante of Park in exchange for government support for his succession of Samsung’s business empire. He spent about a year in jail on those charges before eventually being released in February 2018. Lee, who has a net worth of $6.5 billion, is fourth on Forbes’ list of the 50 richest people in Korea.
Further Reading
Panel Backs Samsung’s Jay Y. Lee Against Charges Of Manipulating Shares To Win Control (Forbes)
Samsung leader Jay Y. Lee indicted in South Korea on allegations linked to 2015 merger (Reuters)
