Home > Latest News > Samsung Heir In Legal Crosshairs After Public Apology

Samsung Heir In Legal Crosshairs After Public Apology

Korean prosecutors have reportedly summoned Samsung Electronics Vice Chairman, Lee Jae-yong, as part of probe into suspicious behaviour during the 2015 merger of key affiliates, Samsung C&T and Cheil Industries – granting the heir further control over the behemoth Samsung Group conglomerate.

The news comes after Lee publicly apologised for scandals associated with his succession in early May, leading to the impeachment of former Group President Park Geun-hye.

Lee pledged to not give management control over to his children, and apologised for allegations of illegal practices associated with his leadership succession and union supression.

According to The Korea Herald, Lee and a handful of other current and former Samsung executives have been brought in for questioning, after the investigation was launched in 2018 at the request of government departments.

Allegations reportedly include that the group systematically inflated the value of Cheil Industries prior to its merger, enabling a favourable merger rate for the heir.

The Korea Herald reports that at the time, Lee (the then largest shareholder of Cheil) did not hold a stake in Samsung C&T.

Other allegations include potential breaches of trust and the Financial Investment Services and Capital Markets Act. 

Market commentators claim Samsung C&T intentionally delayed disclosing key information until the merger closed to avoid a higher valuation. 

The news came as Samsung Chairman, Lee Kun-hee, continued to face health complications, with his only son stepping up.

You may also like
EXCLUSIVE: Samsung Direct Sell Store Upsets Local Retailers
Samsung, Microsoft Team Up For AR HoloLens Project
Huge Shakeup At Samsung: Divisions Merged, CEOs Replaced
Apple Launching Three New IPads For 2022
Watches Replace Wristbands As Wearables Jump 10%