Samsung Heir and Vice Chairman Lee Jae-yong Succession Trial Starts This Week
Samsung Electronics heir and vice chairman Lee Jae-yong, known in Seoul as Jay Y Lee, is set to face trial again this week after being formally charged with violation of capital market laws during a 2015 merger.
The billionaire son of Samsung chairman Lee Kun-hee already spent a year behind bars in 2017 over his role in the corruption scandal which ultimately took down South Korea’s former president Park Guen-hye.
Lee was arrested on September 1 and charged with unfair trading, stock manipulation and breach of trust in relation to the 2015 merger between two Samsung divisions and alleged accounting fraud at Samsung Biolgics, the company’s pharmaceutical unit.
Prosecutors allege Lee orchestrated the company-wide scheme to merge Chiel Industries Inc and Samsung C&T and was involved in fraud in a bid to gain control over the company from his father Kun-hee, who suffered a heart attack in 2014.
In particular, Lee is suspected of inflating the value of Cheil and of intentionally lowering that of Samsung C&T prior to the merger. He is also alleged to have inflated the value of Samsung Bioepis, a joint venture between Samsung Biologics and US-based Biogen Inc.
Lee has vehemently denied the allegations since the investigation commenced in 2018 and claims the merger was a “lawful management activity”.
The Seoul Central District Court will hold a session on Thursday, calling the prosecution and Lee to present their key arguments before the upcoming trial.
Lee himself is not required to be present during this week’s hearing and Bloomberg reports he will instead be visiting Vietnam where he is expected to meet Prime Minister Nguyen Xuan Phuc.
The focus of the meeting will be on Samsung’s prospective investment in the area and the potential construction of a factory for electronic-car batteries in Vietnam.
Lee is still awaiting trial over the 2017 corruption case – after he was arrested for bribery, embezzlement and perjury for giving brides to the then-president’s friend in return for government backing of the 2015 merger. Following his release from prison in 2018, the Supreme Court ordered a retrial.
Lee has served as vice chairman of Samsung since 2012 and is worth an estimated $6.7billion.
His grandfather was Samsung founder Lee Byung-chul, who passed down the role as chairman to Lee’s father Lee Kun-hee.
Kun-hee, 75, has been unable to serve as chairman since his heart attack in 2014, however due to South Korea’s tradition of filial piety, the role cannot be officially passed down to Lee until his father’s death.