Samsung leader appears in court, awaits decision on whether he'll be jailed again
08 June, 2020
The de facto leader of Samsung Group, Jay Y Lee, appeared before a South Korean court on Monday (Jun 8), awaiting a ruling on whether new allegations including accounting fraud and stock manipulation will send him back to jail after a lot more than 2 yrs of freedom.
Prosecutors on Thursday asked the court to issue an arrest warrant against Lee, culminating a probe right into a controversial 2015 merger of two Samsung affiliates that they said helped facilitate Lee's intend to assume greater control of the group.
The chance of more jail time for Lee who has led the group since his father's heart attack in 2014, has cast a pall over the sprawling conglomerate and its own crown jewel, Samsung Electronics, whose twelve-monthly revenue alone is the same as 12 % of South Korea's gross domestic product.
Lee, 51, wearing a nose and mouth mask and a dark suit, appeared at the Seoul court for a hearing that began at 10.30am local time. He didn't answer questions from reporters before entering the court.
After the hearing, he's expected to check out a detention centre to await the judge's decision, expected on Monday or early Tuesday.
Prosecutors have accused Lee to be involved in against the law transactions and stock manipulation that furthered the 2015 merger of Samsung C&T and Cheil Industries. In addition they allege he had a role in inflating the worthiness of Samsung Biologics, which counted Cheil Industries as a significant shareholder.
The merger of both affiliates was seen as key to Lee increasing control of the sprawling group but came under fire by critics who said it rode roughshod over the interests of minority investors.
Samsung on Friday denied the allegation of stock-manipulation against Lee, saying it was "beyond good sense" to claim Lee was mixed up in decision-making.
In a further statement over the weekend, the group said the lengthy probe is weighing on management, which is in "crisis" at the same time when the coronavirus pandemic and US-China trade disputes are increasing uncertainty.
The company declined to create Lee designed for comment.
"If he is arrested, this will further hurt the reputation of Lee and Samsung. There will more questions about his legitimacy as the CEO and successor of the company," said Chang Sea-jin, business professor at Korea Advanced Institute of Science & Technology.
Lee was jailed for approximately one year until February 2018 for his role in a bribery scandal where he was accused of giving horses as gifts to the daughter of a confidante of former President Park Geun-hye to win government support for the merger of both affiliates.
South Korea's Supreme Court has since overturned a lesser court decision to suspend his sentence. It really is unclear when you will have a fresh court ruling over whether he will need to serve further jail time for that conviction.
In South Korea, monetary power is highly concentrated in a number of chaebol or conglomerates, most of which have come across controversy over succession problems. At Samsung, ahead of his father's heart attack, Jay Y Lee had only small stakes in a number of affiliates that raised the possibility he could lose control of the group to other shareholders.
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