South Korean prosecutors sought a five-year jail sentence and a 500 million KRW effective, equal to $375,000, for Samsung Electronics Chief Jay Y. Lee at an appeals court docket on Monday. The appeals case comes 10 months after Lee and 13 former Samsung executives had been initially acquitted of manipulating inventory costs and committing accounting fraud in reference to the merger of Samsung subsidiaries in 2015, a merger that elevated his management over the tech big.
A call on the appeals case is anticipated to be delivered someday between January and February 2025, in keeping with a neighborhood media outlet.
The listening to is critical for 2 causes. First, it comes amid a tricky interval for Samsung, the main maker of reminiscence chips, as the corporate navigates slowing income. Second, it’s a sign of how the nation is slowly working to reform how corporates are structured, which could have a whole lot of ramifications not only for the worldwide client electronics primarily based in a foreign country, but in addition competitors in Korea’s expertise ecosystem extra broadly, together with its startups.
The prosecutors stated on Monday: “The defendant broken the capital market’s basis for the group’s succession… The ruling on this case will function a reference level for restructuring chaebol firms, [which is a large, family-controlled business conglomerate in South Korea], and accounting sooner or later.”
If the defendants are granted leniency, the merger will probably be carried out in a way that prioritizes their pursuits by resorting to illegal and expedient means with out hesitation, the prosecutors added.
South Korean prosecutors have been after Lee for years now. In November of final yr, they referred to as for Lee to be sentenced to 5 years in jail and fined 500 million KRW (the identical requests they made at this time) over fees of violating the Capital Market Act associated to an $8 billion merger of Samsung associates in 2015. They claimed that the merger assisted Lee in gaining management of the Korean electronics firm.
Lee refuted the misconduct allegations throughout the November 2023 listening to and asserted that the merger course of was inside the scope of normal operational procedures for the corporate.
In September 2020, Lee, then the vice-chair of Samsung Electronics, together with different former Samsung executives had been indicted for advocating the merging of Cheil Industries, Samsung’s textile affiliate, with Samsung C&T, its development unit, to take over the tech big’s administration controls in 2015.
They had been additionally accused of inflating the inventory worth of Cheil and Samsung C&T and fraudulent accounting at Samsung Biologics, during which Cheil held a major stake, as a part of the identical case. The prosecution claimed that Samsung had a method to merge that helped Lee solidify his management and take over administration rights.
