‘Suspicion of Illegal Succession of Management Rights’ Lee Jae-yong’s Appeal Trial Begins on May 27

The first trial found all defendants not guilty... Prosecution appeals

The first appellate trial of Samsung Electronics Chairman Lee Jae-yong, who was indicted on charges of involvement in unfair mergers and accounting fraud for the succession of management rights but was acquitted in the first trial, will be held next month.

Samsung Electronics Chairman Lee Jae-yong is attending the first trial sentencing hearing on charges of unfair merger and accounting fraud related to the succession of Samsung Group's management rights, held on the afternoon of February 5 at the Seoul Central District Court in Seocho-gu, Seoul.
[Image source=Yonhap News]

According to the legal community on the 17th, the Criminal Division 13 of the Seoul High Court (Presiding Judges Baek Gang-jin, Kim Seon-hee, Lee In-su) has scheduled the first preparatory hearing for the appeal trial of Chairman Lee, who was indicted on charges including unfair trading and market manipulation under the Capital Markets Act and breach of fiduciary duty, for 3 p.m. on the 27th of next month. The preparatory hearing is a procedure to organize issues and plan evidence investigation by confirming the positions of the prosecution and the defendant before the full trial, and unlike the formal trial, the defendant is not obligated to appear in court.

Chairman Lee was brought to trial in September 2020 on charges of involvement in various unfair transactions, market manipulation, and accounting fraud promoted by the Future Strategy Office during the 2015 merger of Cheil Industries and Samsung C&T, aimed at stably succeeding management rights at minimal cost and strengthening control.

Earlier, the 25-2 Criminal Division of the Seoul Central District Court, which handled the first trial, acquitted Chairman Lee of all 19 charges on February 5. At that time, the court ruled that the merger of the two companies was not solely for the purpose of succession and strengthening control by Chairman Lee, so it could not be considered unfair overall, and there was no evidence to recognize that shareholders suffered damages.

In response, the prosecution appealed, stating, “There is a significant difference in views regarding the purpose and circumstances of the group control succession through the Samsung C&T and Cheil Industries merger, the evidence judgment on accounting fraud and unfair trading acts, fact-finding, and legal judgment compared to the first trial verdict.”