Prosecutors seek 5-year sentence for Samsung chief in controversial merger case

Seoul, Nov 25 (IANS) Prosecutors on Monday demanded a five-year prison sentence for Samsung Electronics Chairman Lee Jae-yong in an appeal against a court decision that acquitted the chairman over the controversial 2015 merger of two Samsung affiliates.

Prosecutors also requested a fine of 500 million won ($356,552) for Lee during the final hearing at the Seoul High Court, reports Yonhap news agency.

Lee was indicted in September 2020 on charges of stock price rigging, breach of duty and accounting fraud in the course of the controversial 2015 merger of two Samsung affiliates, Cheil Industries and Samsung C&T Corp.

The merger, where three Samsung C&T shares were offered for one Cheil share, helped Lee tighten his control of Samsung C&T, the de facto holding company for Samsung Group, through his 23.2 percent stake in Cheil.

Prosecutors suspected that the group manipulated the stock market to inflate the prices of Cheil and drive down Samsung C&T prices through various unfair practices, including disseminating false market information and lobbying the National Pension Service, a major Samsung C&T shareholder, to support the merger.

“What the defendant destroyed in this case is the justice of our economy and the constitutional values that make up the foundation of the capital market,” the prosecution said, adding Lee “deceived” the shareholders by convincing them that favoring the merger was for the national interest.

The prosecution also stressed that an acquittal of Lee would pave the way for dominant shareholders to push through a merger according to their interests in “illegal and expedient” methods.

In its ruling in February, the Seoul Central District Court acquitted Lee of all 19 charges, concluding that Lee’s succession as the group chairman was not the sole purpose of the merger, nor was there any evidence showing that the merger inflicted financial losses on shareholders.

The prosecution appealed the decision. In his final statement, Lee reaffirmed that he “never intended to cause financial harm to shareholders or mislead investors for personal gain.” He maintained he genuinely believed the merger was “beneficial for the future of both companies.”

He pleaded for “a chance” to dedicate himself fully to navigating the company’s current economic challenges and to leading it “a step forward.”

“I am aware that there are deep concerns about Samsung’s future,” he said. “I promise we will overcome these challenging times, even as the current situation is more difficult than ever.”

Shares of Samsung Electronics, the crown jewel of the Samsung Group, have taken a hit recently amid mounting concerns over economic uncertainties and a perceived lack of innovation in the company’s artificial intelligence chip technology.

The appeals court will deliver its final verdict on February 3.

–IANS

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