[Asia Economy Reporter Song Seung-yoon] The prosecution investigating the merger allegations between Samsung C&T and Cheil Industries is summoning and questioning Jang Choong-ki, former deputy head of Samsung's Future Strategy Office, on the 20th.
The Anti-Corruption Investigation Division 4 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) summoned former Deputy Jang this morning to inquire about the overall decision-making process within the group’s top management regarding various suspicions surrounding the 2015 merger between Samsung C&T and Cheil Industries.
Former Deputy Jang is suspected of involvement in the Samsung C&T merger alongside top executives such as former Future Strategy Office chief Choi Ji-sung. Previously, the prosecution had repeatedly requested Jang’s appearance, but he had not complied. However, on the 18th, he was personally served a summons in the appellate retrial court for Vice Chairman Lee Jae-yong of Samsung Electronics and appeared at the prosecution on this day.
The prosecution suspects that the Samsung Group deliberately lowered Samsung C&T’s company value by reducing performance such as overseas construction orders just before the merger to secure a merger ratio favorable to Vice Chairman Lee. It is alleged that the value of Cheil Industries, in which Lee holds shares, was inflated to merge with Samsung C&T, and that accounting fraud was committed at Samsung BioLogics, a Cheil subsidiary, to justify the merger ratio applied advantageously to Lee.
In relation to this, the prosecution also summoned and investigated former Samsung C&T CEO Kim Shin and former Future Strategy Office Strategy Team Leader Kim Jong-jung earlier this month. Former Future Strategy Office chief Choi Ji-sung and Vice Chairman Lee are also expected to be summoned for questioning soon.
The prosecution received a complaint regarding accounting fraud at Samsung BioLogics from the Securities and Futures Commission under the Financial Services Commission in November 2018 and has been conducting related investigations for one year and two months. The accounting fraud allegations at Samsung BioLogics, which triggered the merger and succession suspicion investigation, are practically concluded, with only the judicial processing of CEO Kim Tae-han and others remaining.
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