Prosecutors seek arrest warrant against Samsung heir

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June 5, 2020

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Prosecutors seek arrest warrant against Samsung heir

Source: AFP | 00:30 UTC+8 June 5, 2020 |

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South Korean prosecutors sought an arrest warrant yesterday for Samsung vice-chairman and heir Lee Jae-yong over a controversial merger of two Samsung units.

Lee is vice-chairman of Samsung Electronics — the world’s largest smartphone maker — and was jailed for five years in 2017 for bribery, embezzlement and other offences in connection with a scandal that brought down then South Korean president Park Geun-hye.

The 51-year-old was released a year later on appeal but is undergoing a retrial.

Seoul Central District Prosecutors’ Office said they were seeking a warrant for Lee on suspicion he had been involved in price manipulation and illegal trading during the 2015 merger of Cheil Industries and Samsung C&T.

The transaction was seen as a crucial step in ensuring a smooth third-generational power transfer to Lee, a scion of Samsung’s founding family.

Samsung is by far the biggest of the family-controlled conglomerates, or chaebols, that dominate business in the world’s 12th-largest economy.

The chaebols’ founding families often have only a small ownership stake in their empires, but maintain control through complex webs of cross-shareholdings between units.

Lee was the largest shareholder in Cheil Industries, and critics say Samsung sought to artificially lower the price of C&T to give him a bigger stake in the merged entity — a key part of the Samsung structure — consolidating his grip on the conglomerate.

Prosecutors also requested a warrant against two former Samsung executives over their role in the merger.

The request comes weeks after Lee apologized for a plan that would have seen him take leadership of the group — without going into details — and vow to end the line of family succession.

Lee’s lawyers expressed “strong regret” over the prosecution’s decision.

World

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Prosecutors seek arrest warrant against Samsung heir

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