Samsung's leader indicted for 2015 merger

Samsung Electronics Vice Chairman Lee Jae-yong. [YONHAP]

Samsung’s de facto leader Lee Jae-yong was indicted Tuesday on charges of violating the country’s capital market laws.

On Tuesday, the Seoul Central District Prosecutors’ Office announced the outcome of a 21-month probe into whether the Samsung Electronics vice chairman had broken any laws during the process of cementing his control over the country’s largest conglomerate.

The prosecutors said Lee and other top executives broke laws during the controversial merger of Samsung C&T and Cheil Industries in 2015. The merger strengthened Lee's control over Samsung Group after his father, Lee Kun-hee, was hospitalized in 2014 following a heart attack.

Lee and 10 former and current Samsung executives were indicted Tuesday on charges of violating the Financial Investment Services and Capital Markets Act.

Lee and nine executives including Choi Gee-sung, former head of the Future Strategy Office of Samsung Group, were indicted on charges of committing unfair, deceptive trade practices, manipulating stock prices and breach of trust. Chang Choong-ki, former deputy head of the Future Strategy Office, was indicted on charges of making unfair trades.

It is the second time for Lee to face a criminal indictment. On Feb. 28, 2017, Lee was indicted and detained by an independent counsel team that probed former President Park Geun-hye’s abuse of power and bribery scandal.

Lee was convicted of bribing Park through a confidante and jailed. He was released by the Seoul High Court in 2018, and the Supreme Court ordered a retrial in 2019. The retrial is still ongoing.

The prosecution made an unprecedented decision to defy an outside experts’ recommendation on Lee's indictment. After a validity review of the criminal investigation into the tycoon in June, the panel recommended the prosecutors call off their probe into Lee and not indict him.

After being questioned twice in May, Lee demanded the outside experts’ review to decide the validity of the probe.

The Seoul Central District Prosecutors’ Office spent the last two months deciding whether it should accept the experts’ recommendation or not.

It is the first time that prosecutors went against a review panel’s decision. In each of the eight previous times the process was used, the prosecutors respected the experts’ recommendations.

BY SER MYO-JA [ser.myoja@joongang.co.kr]