Samsung Electronics Co. Chairman Lee Jae-yong enters the Seoul Central District Court in southern Seoul on Nov. 17, 2023, for a court hearing concerning the controversial 2015 merger of two Samsung affiliates. (Yonhap)
SEOUL, Nov. 21 (Korea Bizwire) – The chief of an independent corporate compliance oversight committee of Samsung Group said Tuesday he expects the court to look into Samsung’s efforts to strengthen ethics management in connection with an ongoing trial on allegations against the group’s chief over the controversial 2015 merger of two Samsung affiliates.
On Friday, prosecutors demanded a five-year prison sentence for Samsung Electronics Chairman Lee Jae-yong on charges of stock price rigging and accounting fraud in the controversial merger of two Samsung affiliates — Cheil Industries Inc. and Samsung C&T Corp. — in 2015.
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.
The merger was seen as crucial to Lee’s succession as the heir of the family-controlled group, as his father Lee Kun-hee had suffered a heart attack the previous year.
“I don’t think it is appropriate for a compliance committee head to give an opinion ahead of a court decision … but I think the judicial branch will come to an excellent decision as it is the last bastion of keeping our society in place,” Lee Chan-hee, the compliance committee chief, said, referring to the case involving the Samsung Group chief.
During the Friday hearing, Lee said the merger was part of Samsung’s broader plan to boost the competitiveness of the affiliates, refuting the prosecutors’ allegation that he intended to cause damage to other shareholders in order to increase his own shares.
“I have never prioritized my personal interests in the process of merging Samsung C&T and Cheil Industries. I and the other defendants believed that the merger would be advantageous for both companies,” Lee said in his testimony.
“As an entrepreneur, I have a responsibility to continue to create profits and jobs. I ask for an opportunity to focus all of my capabilities solely on moving forward,” he added.
The sentence request came more than three years after Lee was indicted in September 2020 in the case. The court will hand down a ruling on Jan. 26.
Samsung launched the committee in 2020 to monitor corporate compliance with laws and ethics in light of public criticism over Samsung’s connection to a high-profile corruption case that led to the impeachment of former President Park Geun-hye.
Samsung leader Lee was sentenced to 2 1/2 years in prison in January 2021 after being convicted of bribery in connection with the scandal. He was released on parole seven months later and reinstated after receiving a presidential pardon last year.
(Yonhap)
