1 week Ago By [email protected](KoreaTimes)
Samsung Electronics Executive Chairman Lee Jae-yong, center, remains tight-lipped as reporters ask questions on his way to the Seoul High Court in this November 2024 photo. Yonhap Lee unlikely to go abroad during Lunar New Year holiday By Park Jae-hyuk The almost weeklong Lunar New Year holiday this year is unlikely to be a time of relaxation for Samsung Electronics Executive Chairman Lee Jae-yong. The head of Korea’s largest conglomerate has to be prepared this week for all possible scenarios facing him, given the upcoming appellate court ruling slated for Feb.
3 regarding his alleged stock price manipulation and accounting fraud charges involving the 2015 merger of Samsung C&T and Cheil Industries. If the Seoul High Court rules in favor of the prosecution, the business tycoon could be imprisoned for up to five years and ordered to pay the maximum fine of 500 million won ($348,000). According to industry officials, Lee is expected to shy away from public attention before the ruling, skipping his regular visits to Samsung’s overseas operations.
Since he started representing the business group in 2014, he has gone abroad during the Lunar New Year and Chuseok holidays almost every year to encourage Samsung’s employees there and to meet overseas business leaders. He went to Malaysia during last year's Lunar New Year holiday to inspect Samsung SDI’s factory in the Southeast Asian country. The Samsung chairman paid that visit several days after the Seoul District Court cleared him of the allegations regarding the merger of the affiliates, which, according to the prosecution, was intended to enable him to illegally inherit management control over the business group from his father.
Legal experts anticipated at that time that upper courts would uphold the lower court’s decision. Prosecutors again demand 5-year sentence for Samsung chief in controversial 2015 merger case 2024-11-25 17:15 | Law & Crime Samsung to ramp up investments as chairman cleared of legal hurdles 2024-02-05 16:48 | Companies However, things changed since his acquittal last February. Last August, the Seoul Administrative Court accepted the financial regulator’s claim that Samsung Biologics had cooked the books in 2015, although the court rejected sanctions on the biotech firm, which had been imposed after regarding the company’s lawful accounting before 2014 as also illegal.
The alleged accounting fraud at Samsung Biologics was seen to be intended to help Lee inherit control of Samsung more smoothly through the merger of Samsung C&T and Cheil Industries. Last October, the prosecution was allowed to add the administrative court’s remarks to its bill of indictment presented to the appellate court. The National Pension Service also filed a civil suit against Lee last September to claim the state pension fund’s losses from the 2015 merger of the Samsung affiliates.
The damage claim was contrary to the local court’s denial that the merger had incurred financial losses to Samsung C&T’s shareholders. Additionally, the prolonged political turmoil has been seen as unfavorable to the Samsung chief, considering the Yoon Suk Yeol administration’s business-friendly stance. Yoon pardoned Lee in 2022, a year after the chairman was released on parole after being sent to jail in January 2021 on charges of bribing the impeached former President Park Geun-hye to win her administration’s support for the merger.
Members of liberal civic groups and labor unions chant during a press conference in front of the Seoul High Court, Jan. 16, to urge the court to punish Samsung Electronics Executive Chairman Lee Jae-yong. Courtesy of People's Solidarity for Participatory Democracy “This case is a very serious financial crime, which disrupted the economic justice and the capital market’s order, considering the betrayal of trust among domestic and foreign investors in soundness and fairness of the Korean market and corporate management,” a group of liberal organizations and labor unions said in a letter to the appellate court on Jan.
16. “We should now put an end to unfair practices of exempting conglomerates from the judicial order and should restore trust in economic and legal justice,” they added. In his concluding testimony last November, Lee emphasized that the merger had been intended to guarantee his company’s survival and sustainable growth, not to benefit himself or to deceive investors.
“I am well aware of grave concerns about Samsung’s future,” he said. “Although the reality facing us is tougher than ever before, we will definitely overcome difficulties and take a step forward.”.
