The global boss of Samsung is already familiar with prison life, now prosecutors in South Korean want him back in the slammer, claiming he manipulated stock during the 2015 merger of two Samsung affiliates.
Prosecutors in South Korea have proposed a sentence of five years in prison and a fine of A$500,000 for Samsung Electronics Chairman Lee Jae-yong.
The new demand follows an appeal earlier this year after a lower court acquitted Lee of all 19 charges it had filed.
This week the prosecution kept to their original claims, insisting the chief of the country’s largest conglomerate rigged the company valuation and falsified accounting records in the merger of Cheil Industries and Samsung C&T Corp. in 2015.
Samsung Electronics Chairman Lee Jae-yong seen centre.
Indicting 12 other Samsung executives on the same charges, the prosecution claimed the criminal actions were aimed at strengthening the Samsung chief’s control over the business empire at a lower cost.
“In this case, the accused damaged the constitutional value that upholds the justice of our economy and builds the fundamentals of the capital market,” the prosecutors said during this week hearing according to the Korean Times.
“When the merger process became unclear and faced strong backlash from shareholders, the defendants deceived them by claiming the merger would serve the national interest.”
The prosecutors urged the court to reconsider the acquittal, saying the case would set the precedent for future rulings on chaebol group restructuring and accounting management.
“To indulge the defendant would be to give controlling shareholders free rein to pursue mergers by unlawful means,” the prosecutors added.
At the time of the merger, Lee Jae-yong held 23.3 percent of shares in Cheil Industries. After the merger, he and his family secured a combined 39.9 percent shares in the merged entity, Samsung C&T, which now serves as the group’s de facto holding unit.
The final ruling in the retrial is expected before the court’s personnel reshuffle in February next year.
Currently Samsung stock is down 29% year to date.
