Prosecutors seek 5-year sentence for Samsung heir Lee Jae-yong

Industry

Published: 17 Nov. 2023, 13:36 Updated: 17 Nov. 2023, 19:10

Prosecutors seek 5-year sentence for Samsung heir Lee Jae-yong

Samsung Electronics Executive Chairman Lee Jae-yong attends a hearing on Friday in Seocho District, southern Seoul. [YONHAP]

Prosecutors are seeking a five-year prison sentence for Samsung Electronics Executive Chairman Lee Jae-yong, alleging Lee engaged in unfair practices to inherit management rights of some of Samsung's affiliates.

They are also seeking a 500 million won fine ($386,600) for Lee.

"[We seek such penalties] considering the fact that [Lee is] continuously denying the crime, that he is the ultimate decision maker and that he is the practical beneficiary,” the prosecution said in a final hearing on Lee's case at the Seoul Central District Court on Friday.

“We have already witnessed how [Lee] inherited management without paying taxes through sales of Everland's convertible bonds,” it said. “Samsung has again pulled off a free management succession.”

The prosecution's request comes three years after Lee was prosecuted in 2020 on charges of violating the Capital Market Act and embezzlement.

He was accused of illegally interfering in the merger of Cheil Industries and Samsung C&T in 2015 to tighten his grip over the group for future leadership succession.

The prosecution pointed out that the merger ratio of Cheil Industries and Samsung C&T, which was at 1 to 0.35, was unfair, considering that Samsung C&T's revenue was 5.5 times that of Cheil.

Lee had held on to 23.2 percent of Cheil Industries back then. The merger led Lee to become a top shareholder of Samsung C&T, which is the de facto holding company of the Samsung affiliates.

Lee was also charged for several embezzlement issues to manipulate both companies' stock prices.

Prosecutors also said that Cheil Industries subsidiary Samsung Biologics committed accounting fraud to inflate its value by 4.5 trillion won after the merger.

"I did not consider my own personal benefit during the process of the merger," Lee said in his final testimony Friday.

"I seek for a chance so that I can concentrate my entire capability to step forward and make [Samsung] a company that is top-tier and can be loved by the people."

The first ruling is expected before February.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]