After completing his first business trip to China since the COVID-19 pandemic, Lee Jae-yong, Vice Chairman of Samsung Electronics, is returning to Seoul through the Gimpo Business Aviation Center (SGBAC) on the 19th. Photo by Moon Honam munonam@
[Asia Economy Reporter Kim Hyung-min] On the 26th, the prosecution is summoning and investigating Lee Jae-yong, Vice Chairman of Samsung Electronics (52).
The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) summoned Vice Chairman Lee in a suspect capacity in connection with a complaint filed by the People's Solidarity for Participatory Democracy Economic and Financial Center at 8 a.m. today and is conducting a closed-door investigation. A prosecution official stated, "He is being investigated in the video recording room."
Earlier, in December last year, the People's Solidarity for Participatory Democracy Economic and Financial Center filed a complaint against Vice Chairman Lee for violations of the Capital Markets Act related to allegations of accounting fraud at Samsung BioLogics (Samsung Bio).
The prosecution is questioning Vice Chairman Lee about whether the merger process of Samsung C&T and Cheil Industries in May 2015 and the accounting fraud allegations involving Samsung BioLogics, a subsidiary of Cheil Industries, were part of a management succession plan.
This is the first time in about three years and three months that Vice Chairman Lee is being investigated as a suspect by the prosecution since he was summoned and investigated by the special prosecution team led by Park Young-soo in February 2017 in connection with the political scandal.
The prosecution suspects that not only the accounting fraud charges against Samsung Bio but also the abnormal drop in Samsung C&T's company value just before the merger with Cheil Industries were planned at the group level to strengthen Vice Chairman Lee's control.
Regarding these allegations, the prosecution recently summoned and investigated a series of individuals including Choi Ji-sung, former head of Samsung's Future Strategy Office (Vice Chairman, 69), Kim Jong-joong, former head of the Future Strategy Office's Strategy Team (President, 64), Choi Chi-hoon, chairman of Samsung C&T's board (63), Lee Young-ho, president of Samsung C&T (61), Jung Hyun-ho, head of Samsung Electronics' Business Support TF (President, 61), and Kim Tae-han, president of Samsung Bio (63).
On the 6th, Vice Chairman Lee issued a public apology acknowledging that many controversies surrounding Samsung stemmed from management succession issues but did not clarify his specific stance on the related allegations or charges.
Accordingly, it is expected that even if some facts are acknowledged during the prosecution's investigation, Vice Chairman Lee will actively defend himself against any charges.
Samsung has consistently maintained that Samsung BioLogics did not inflate the value of its bio business through accounting fraud and that the merger with Samsung C&T was conducted through legitimate procedures.
After the summons investigation of Vice Chairman Lee is completed, the prosecution plans to decide on the disposition of related individuals and conclude the investigation.
If the investigation concludes within this month, it will mark the end of the probe into the allegations related to the 'Samsung Bio accounting fraud' after one year and six months since the prosecution began the investigation following a complaint from the Securities and Futures Commission under the Financial Services Commission in November 2018.
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