SEOUL – South Korea’s prosecution is wrapping up its investigation of a succession case at Samsung Group and is likely to charge the group’s heir Lee Jae Yong for his role in a controversial merger and alleged accounting fraud, reports Yonhap news agency quoting legal sources on Tuesday.
It is believed that the prosecution will go ahead and charge Lee without detention as early as Tuesday with stock manipulation and violation of capital market laws in relation to the 2015 merger between two Samsung affiliates, Cheil Industries Inc and Samsung C&T, and alleged accounting fraud at the pharmaceutical unit of Samsung Biologics.
Prosecutors suspect that Lee, the vice-chairman of Samsung Electronics, was involved in a companywide scheme to plan the merger and fraud in a way to take over control of the country’s biggest conglomerate from his ailing father, Lee Kun Hee, who suffered a heart attack in 2014.
They, in particular, believe that the value of Cheil, of which Lee was the largest shareholder with a stake of 23.2 per cent, was inflated and that of Samsung C&T was lowered intentionally prior to the merger.
Lee is also suspected of being part of the alleged plan to inflate the value of Samsung Bioepis, a joint venture between Samsung Biologics, a subsidiary of Cheil Industries, and the United States-based Biogen Inc.
He has consistently denied the allegations since the investigation started in November 2018.
But prosecutors have shown confidence that there is sufficient evidence to support the charges against Lee.