Samsung Chief JY Lee faces more legal troubles as South Korean prosecutors seek a five-year jail term for him. He is accused of accounting fraud and stock manipulation linked to the controversial 2015 merger of two of the company’s units. The appeals hearing concluded this Monday, and the court could announce its decision in the coming months.
Prosecutors seek five-year jail for Samsung Chief JY Lee
Over the past few years, South Korean prosecutors have dragged JY Lee to court on multiple occasions. The Samsung Chief has already served a prison sentence in a bribery case involving former President Park Geun-hye. He received a presidential pardon in this case in 2022.
In the meantime, prosecutors indicted him in an accounting fraud and stock manipulation case. This case involves the 2015 merger of Cheil Industries and Samsung C&T, two separate business divisions under the Samsung Group. Prosecutors claim that Lee, who served as vice-chair of Samsung Electronics in 2015, was part of a group of executives that artificially inflated the stock price of Cheil Industries.
The executives are also accused of simultaneously devaluing Samsung C&T as part of their efforts to bolster the billionaire heir’s control over the conglomerate during the merger. In February this year, a lower court pronounced Lee not guilty but prosecutors appealed to the higher court. They have demanded a five-year jail term and a $375,000 fine for the Samsung Chief.
Apart from this, the prosecution has requested sentences for several former Samsung executives. Korean prosecutors say that the ruling in this case will set an important standard for restructuring conglomerates and accounting practices. Prosecutors worry that if controlling shareholders are found not guilty, they will feel free to use illegal methods for mergers that help themselves.
“They abused the authority granted by the company and shareholders for the private interests of the group leader and abused extreme imbalance of information,” prosecutors said. Lee, meanwhile, has denied any wrongdoing, claiming the merger and accounting process were part of the group’s normal business activities.
“I am well aware that concerns about Samsung’s future are very high,” he said. “I will definitely overcome this difficult situation and move forward.” If the higher court upholds the lower court’s decision, prosecutors can appeal the ruling to the top court.
