South Korean prosecutors sought a five-year jail sentence and a 500 million KRW effective, equal to $375,000, for Samsung Electronics Chief Jay Y. Lee at an appeals court docket on Monday. The appeals case comes 10 months after Lee and 13 former Samsung executives have been initially acquitted of manipulating inventory costs and committing accounting fraud in reference to the merger of Samsung subsidiaries in 2015, a merger that elevated his management over the tech large.
A choice on the appeals case is anticipated to be delivered someday between January and February 2025, in response to a neighborhood media outlet.
The listening to is critical for 2 causes. First, it comes amid a troublesome interval for Samsung, the main maker of reminiscence chips, as the corporate navigates slowing profits. Second, it’s a sign of how the nation is slowly working to reform how corporates are structured, which could have loads of ramifications not only for the worldwide shopper electronics primarily based in a foreign country, but additionally competitors in Korea’s know-how ecosystem extra extensively, together with its startups.
The prosecutors stated on Monday: “The defendant broken the capital market’s basis for the group’s succession… The ruling on this case will function a reference level for restructuring chaebol corporations, [which is a large, family-controlled business conglomerate in South Korea], and accounting sooner or later.”
If the defendants are granted leniency, the merger will probably be carried out in a fashion that prioritizes their pursuits by resorting to illegal and expedient means with out hesitation, the prosecutors added.
South Korean prosecutors have been after Lee for years now. In November of final 12 months, they referred to as for Lee to be sentenced to 5 years in jail and fined 500 million KRW (the identical requests they made right this moment) over costs of violating the Capital Market Act associated to an $8 billion merger of Samsung associates in 2015. They claimed that the merger assisted Lee in gaining management of the Korean electronics firm.
Lee refuted the misconduct allegations through the November 2023 listening to and asserted that the merger course of was inside the scope of ordinary operational procedures for the corporate.
In September 2020, Lee, then the vice-chair of Samsung Electronics, together with different former Samsung executives have been indicted for advocating the merging of Cheil Industries, Samsung’s textile affiliate, with Samsung C&T, its building unit, to take over the tech large’s administration controls in 2015.
They have been additionally accused of inflating the inventory worth of Cheil and Samsung C&T and fraudulent accounting at Samsung Biologics, by which Cheil held a major stake, as a part of the identical case. The prosecution claimed that Samsung had a technique to merge that helped Lee solidify his management and take over administration rights.
