The 'First Trial of Lee Jae-yong,' Postponed Due to Surgery, Will Be Held This Week

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The first trial of Samsung Electronics Vice Chairman Lee Jae-yong, who was indicted on charges of directing and approving unfair mergers of affiliates to secure Samsung Group's management succession, will be held on the 22nd. Vice Chairman Lee, who underwent appendicitis surgery and was discharged, will appear in court on that day.

According to the legal community on the 18th, the Seoul Central District Court Criminal Division 25-2 (Presiding Judges Park Jeong-je, Park Sa-rang, Kwon Seong-su) will hold the first trial on the 22nd for Vice Chairman Lee and 10 Samsung officials, who were indicted on charges including unfair trading practices and market manipulation under the Capital Markets Act, and breach of trust in the course of business.

This day marks the first formal trial, and the defendants are required to attend. Accordingly, Vice Chairman Lee must appear in court.

The initial trial was scheduled for the 25th of last month but was postponed as Vice Chairman Lee, who was serving a prison sentence, underwent appendicitis surgery and was hospitalized. Vice Chairman Lee, discharged on the 15th, reportedly told the medical staff who recommended extending his hospitalization, "I do not want to cause more trouble."

The prosecution judged that Samsung Group, during the 2015 merger of Samsung C&T and Cheil Industries, under the leadership of the Future Strategy Office, disseminated false information and announced false favorable news to inflate Cheil Industries' stock price and lower Samsung C&T's stock price, and that Vice Chairman Lee was informed of and approved important matters during this process, leading to his indictment last September.

At that time, Samsung C&T and Cheil Industries resolved to merge through their boards of directors under the condition of exchanging one share of Cheil Industries for about three shares of Samsung C&T.

Accordingly, Vice Chairman Lee, who held a 23.2% stake in Cheil Industries, secured shares in the integrated Samsung C&T, which functions as a holding company after the merger, thereby strengthening his control over the group.

The prosecution claims that this merger was an 'illegal management succession' by Vice Chairman Lee and caused enormous damage to Samsung C&T shareholders.

In response, Vice Chairman Lee's side argued that the merger was legally conducted out of business necessity and had positive effects on the companies.

Meanwhile, Vice Chairman Lee was sentenced to 2 years and 6 months in prison in January in the retrial of the 'state affairs manipulation' case, and he is currently serving his sentence, scheduled for release in July next year.