[iNews24 Reporter Min Hye-jeong] Lee Jae-yong, the chairman of Samsung Electronics, who was sent to trial on charges of unfair merger allegations between Samsung C&T and Cheil Industries, headed to court without any special mention before the decision trial.
The Seoul Central District Court’s Criminal Agreement 25-2 Division will hold a decision trial on the charges of 14 capital market and financial investment law violations, including Chairman Lee, on the 17th. Chairman Lee arrived at the court at 9:40 a.m. on the same day. He entered the courtroom without answering the reporters’ questions about his thoughts on the decision trial.
In the morning of the decision trial, the prosecution will present its closing argument. In the afternoon, the final arguments of the defense lawyers and the final statements of the defendants, including Chairman Lee, Choi Ji-sung, former head of Samsung Electronics’ Future Strategy Office, and Jang Chung-gi, former deputy head of the Future Strategy Office, will be held. With this trial, Chairman Lee’s trial will be concluded approximately 3 years and 2 months after the indictment.
Chairman Lee, who has denied the charges, is expected to plead not guilty through his own statement. With the conflicting arguments between Samsung and the prosecution, and with a vast amount of investigation records totaling 190,000 pages, the decision of the first-instance trial is expected to be delayed.
The charges against Chairman Lee can be broadly categorized as violations of the Capital Market Act related to the merger of Samsung C&T and Cheil Industries, embezzlement committed in the process, and violations of the External Audit Act regarding fictitious accounting.
Samsung C&T and Cheil Industries resolved to merge in May 2015 through a board of directors meeting, exchanging 1 share of Cheil Industries for approximately 3 shares of Samsung C&T. Regarding the merger between Samsung C&T and Cheil Industries, the merger ratio between listed companies is determined based on the average stock price over a certain period of time, so Samsung argues that there was no problem with the ratio calculation. On the other hand, the prosecution suspects that Chairman Lee manipulated the merger ratio to secure Samsung C&T shares stably.
The prosecution also reported that in order to achieve a favorable merger ratio, Samsung BioLogics, a subsidiary of Cheil Industries, engaged in fictitious accounting of assets worth more than 4 trillion won. However, Samsung argues that the merger was carried out legally for management reasons and that both companies did not incur any losses.
