SEOUL (Agencies): South Korean prosecutors have requested a five-year jail term for Jay Y. Lee, the chief of Samsung Electronics, over allegations of accounting fraud and stock price manipulation related to an $8 billion merger of Samsung affiliates in 2015. Lee, 55, has consistently denied any wrongdoing.
The trial, which has spanned three years, is now in its final lower court session, with a ruling expected in the coming months.
The prosecutors allege that Lee and other former executives violated the Capital Markets Act to facilitate the 2015 merger of Samsung C&T and Cheil Industries, enabling Lee to strengthen his control over Samsung Electronics. They claim that the executives engaged in stock price manipulation and other illicit activities, benefiting themselves at the expense of minority investors.
According to the prosecution, the defendants undermined the foundation of the capital market to facilitate the succession of the group’s leader, abusing the authority granted by the company and shareholders for personal interests. Lee and the executives maintain their innocence, asserting that the merger and associated accounting processes were part of normal management activities.
This case is the last legal challenge against Lee, who was previously pardoned for a separate conviction and solidified his leadership position as the executive chairman of Samsung last year. Depending on the verdict, Lee’s ability to shape the future of Samsung Electronics and its affiliates may be impacted, with an acquittal potentially granting him more flexibility in pursuing strategic decisions, including mergers and acquisitions.
Lee had previously been convicted of bribing former South Korean President Park Geun-hye, serving a total of 18 months in jail from 2017 to 2021. He was paroled in 2021 and pardoned in 2022.