Prosecutors demand five-year sentence for Samsung chief over 2015 merger

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Prosecutors demand five-year sentence for Samsung chief over 2015 merger

Published: 25 Nov. 2024, 18:07

Samsung Electronics Chairman Lee Jae-yong heads to trial in Seocho District, southern Seoul, on Oct. 14. [NEWS1]

Prosecutors, on Monday, demanded a five-year prison sentence for Samsung Electronics Chairman Lee Jae-yong in an appeal of a previous court decision that had acquitted the chairman of charges related to the 2015 merger of two Samsung affiliates.

Prosecutors also requested that Lee be fined of 500 million won ($356,552) during the final hearing at the Seoul High Court.

Lee was indicted in September 2020 on charges of stock price rigging, breach of duty and accounting fraud in the course of the 2015 merger of two Samsung affiliates, Cheil Industries and Samsung C&T.

The merger, wherein three Samsung C&T shares were offered for one Cheil share, helped Lee tighten his control of Samsung C&T, the de facto holding company of Samsung Group, through his 23.2 percent stake in Cheil.

Prosecutors suspect that the group had manipulated the stock market to inflate the price of Cheil and drive down Samsung C&T through various unfair practices, including disseminating false market information and lobbying National Pension Service, a major Samsung C&T shareholder, to support the merger.

The prosecution also stressed that acquitting Lee would pave the way for dominant shareholders to push through a merger, according to their interests, via “illegal and expedient” methods.

The Seoul Central District Court acquitted Lee of all 19 charges in February, concluding that Lee's succession as the group's chairman was not the sole purpose of the merger and that it had not been presented sufficient evidence to prove that the deal had inflicted financial losses on shareholders.

The prosecution appealed the decision.

Yonhap