The 2nd Trial Court for Lee Jae-yong's Unfair Merger Case Orders Prosecution to "Clarify Standards for Fraudulent Acts"

4th Trial of 2nd Instance for 'Samsung Unfair Merger' Allegations Held

Samsung Electronics Chairman Lee Jae-yong is entering the courthouse to attend the continued second trial hearing related to Samsung's unfair merger charges held at the Seoul High Court on the 11th.

The appellate court in the case of Samsung Electronics Chairman Lee Jae-yong's 'unfair merger' allegations requested clarification on the criteria for fraudulent acts, stating that the scope of misconduct claimed by the prosecution was too broad.

The Seoul High Court Criminal Division 13 (Presiding Judges Baek Gang-jin, Kim Seon-hee, and Lee In-su) held a hearing on the 11th for Lee's appeal trial, continuing the examination of the background and purpose of the 2015 merger between Samsung C&T and Cheil Industries.

At the trial, the prosecution argued that immediately after the merger announcement, negative public opinion surged, and Samsung, led by Chairman Lee, devised a response strategy. They claimed, "The response strategy included a comprehensive plan for fraudulent acts." Specifically, the prosecution stated that various fraudulent acts occurred related to the promotion of Samsung Bioepis's listing for the merger and securing voting rights from the National Pension Service.

In response, the court said, "The term 'fraudulent acts' is too broad, and the Supreme Court's standards are unclear," adding, "Isn't it possible that the threshold for illegality, unlawfulness, and maliciousness contested by the original trial or defense is not met?" The court further asked, "Can all acts violating internal administrative regulations be punished as individual fraudulent acts?" and requested, "If you claim guilt for every individual act, please argue in the comprehensive closing statement that all charges surpass that threshold."

Regarding the prosecution's claim of market manipulation during the merger of the two companies, the court demanded, "To prove (market manipulation), numerical data must be presented statistically."

Earlier, Chairman Lee was indicted in September 2020 on charges of involvement in various fraudulent transactions, market manipulation, and accounting fraud pushed by the Future Strategy Office to securely succeed management rights at minimal cost and strengthen control during the Cheil Industries-Samsung C&T merger process.