Prosecution Seeks 5 Years Imprisonment and 500 Million Won Fine for Lee Jae-yong over Samsung Unfair Merger Allegations

Prosecutors: "Successful Free Succession of Management Rights... Main Cause of Declining National Competitiveness"

The prosecution has requested a 5-year prison sentence for Samsung Electronics Chairman Lee Jae-yong in connection with the allegations of unfair merger between Samsung C&T Corporation and Cheil Industries.

Samsung Electronics Chairman Lee Jae-yong arrived at the Seoul Central District Court on the 17th to attend the first trial's final hearing on the unfair merger of Samsung C&T and Cheil Industries, and is heading to the courtroom. Photo by Heo Young-han younghan@

At the final trial held on the 17th under the jurisdiction of the Seoul Central District Court Criminal Division 25-2 (Presiding Judge Park Jeong-je, Judges Ji Gwi-yeon and Park Jeong-gil), the prosecution asked the court to sentence Chairman Lee and 13 others to 5 years in prison and a fine of 500 million won for violations of the Capital Markets Act and the Financial Investment Services and Capital Markets Act.

The prosecution stated, "Our society has already witnessed Samsung's tax-free succession of management rights through cases such as the Everland convertible bond incident," and added, "Samsung once again attempted and succeeded in a free succession of management rights in this case."

They continued, "The structure that allows controlling shareholders of corporate groups to pursue private interests is the biggest factor deepening the Korea discount and a major cause of weakening national competitiveness," and said, "Our society has continuously strived to resolve this, but ironically, it was undermined by Samsung, the leading company."

Chairman Lee was indicted in September 2020 on charges of accounting fraud and unfair transactions during the 2015 merger process of Samsung C&T Corporation and Cheil Industries, which was pursued through Samsung Future Strategy Office for the purpose of succession of management rights.

The prosecution believes that Samsung inflated the value of Cheil Industries and deliberately lowered the value of Samsung C&T Corporation to increase Vice Chairman Lee's control over the group.