ANN/THE KOREA HERALD – The Seoul district court is scheduled for a verdict hearing Monday for Samsung Electronics Chairman Lee Jae-yong along with 14 current and former Samsung employees over the 2015 merger fraud case of two Samsung affiliates – Cheil Industries and Samsung C&T Corp. They are charged with rigging company valuations and accounting fraud.
While the final hearing trial in November 2023 resulted in a fine of KRW500 million (USD373,000) and a prison sentence of five years for Lee, the court will only issue its final ruling today as both Lee and the prosecution submitted additional materials which pushed back the verdict hearing, originally set on January 26.
The prosecution argues that Lee and the company executives planned and executed a series of illegal steps in the process of merging Samsung Group’s construction and fashion companies. The prosecutors allege the illegal processes allowed Lee to increase his control over the conglomerate.
Lee denies all charges, saying his decisions at the time were made to enhance the competitiveness of the two companies.
“My goal was to keep the company surviving and growing while earning support from the employees, stakeholders and the people. The merger of the two companies was part of the effort towards that goal,” Lee said in testimony during the final hearing in November last year.
“I have never prioritised my personal interests in the process of the merger, and I swear I also have never imagined I would increase my shares and hurt other shareholders.”
Over the envisioned court ruling, industry observers raise concerns of possible leadership vacuum, at a time when the company is experiencing the worst earnings record after a severe downturn in the global semiconductor industry.
In the fiscal year of 2023, Samsung posted KRW6.56 trillion in operating profit, down 84.9 per cent from a year earlier. It is the first time that the tech giant logged an annual operating profit of less than KRW10 trillion since 2008, when it posted KRW6.03 trillion amid the global financial crisis.
