SEOUL: A South Korean court was set to rule Monday on whether Samsung Electronics heir Lee Jae-yong committed a raft of crimes to shore up his succession from a controversial merger.
The Seoul Central District Court verdict will decide whether Lee is guilty of several charges from stock price rigging to breach of trust in the 2015 merger between Samsung C&T and Cheil Industries.
The tie-up was widely seen as helping to ensure a smooth third-generational power transfer to Lee, a scion of Samsung’s founding family and who has already served jail time over a high-level fraud and embezzlement case.
Critics argue that the 2015 takeover deliberately undervalued the construction firm’s stock price, unfairly affecting its shareholders.Lee is the current executive chairman of Samsung Electronics, the crown jewel of the sprawling Samsung group.
In the deal, three C&T shares were offered for one Cheil share, a transaction prosecutors claimed had “undermined the fundamentals of the market”, according to the Yonhap news agency.
In the merger process “multiple illegal acts were mobilised… for the smooth succession of the group chief”, the prosecution said in its closing argument in November, demanding a five-year sentence, Yonhap reported.
“A structure in which company’s owner groups are allowed to pursue personal interest is the biggest cause of the worsening Korea discount,” the prosecution said, referring to the perceived global undervaluing of South Korean businesses.
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“We feel utterly distressed it was done by Samsung, the country’s number-one company.”
Lee said he had not been driven by “personal interest in the merger”.
“I swear I had never imagined increasing my stake at the expense of causing damage to other shareholders,” he was reported by Yonhap as saying in his closing argument.
The verdict comes almost three years after the first court hearing on the case in April 2021, with more than 100 hearings being held since.
Lee spent 18 months in jail after his fraud and embezzlement conviction that followed a sweeping investigation that also brought down former president Park Geun-hye in 2017.
Lee was released on parole in August 2021, having served half his sentence.
He returned to management shortly after release and was officially named executive chairman of Samsung Electronics in October 2022, two months after South Korea’s president pardoned him for the embezzlement and corruption convictions.