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South Korean prosecutors asked for a five-year prison sentence and a fine of 500 million Korean won, equivalent to $375,000, for Samsung Electronics Chairman Jay Y. Lee in an appeals court on Monday. The appeal case comes 10 months after Lee and 13 former Samsung executives were acquitted of manipulating stock prices and committing accounting fraud in connection with the 2015 merger of Samsung subsidiaries, a merger that increased its control over the tech giant.
A decision on the appeal case is expected to be made sometime between January and February 2025, according to local media.
The hearing is important for two reasons. First, this comes amid a difficult period that Samsung, the leading memory chip maker, is going through while the company is on the move Slowing profits. Second, it’s a sign of how the country is slowly working to reform how companies are structured, which will have a lot of ramifications not only for global consumer electronics beyond the country, but also for competition in Korea’s tech ecosystem more broadly, including its beginnings.
“The defendant has damaged the capital market basis for the group’s succession… The ruling in this case will serve as a reference point for the restructuring of Chaebol Enterprises, (a large family-controlled business conglomerate in South Korea),” prosecutors said on Monday. and accountability in the future.”
If the defendants are granted leniency, the merger will be implemented in a manner that prioritizes their interests by resorting to illegal and advantageous means without hesitation, the plaintiffs added.
South Korean prosecutors have been pursuing Lee for years. In November last year, they asked for Lee to be sentenced to five years in prison and a fine of 500 million KRW (the same requests they made today) for violating the capital market law related to the $8 billion merger of Samsung subsidiaries in 2015. They claimed that the merger Lee helped take control of the Korean electronics company.
Lee refuted the misconduct allegations during the November 2023 hearing and maintained that the merger was within the scope of the company’s standard operating procedures.
In September 2020, Lee, who was then vice president of Samsung Electronics, was accused, along with other former Samsung executives, of advocating the merger of Cheil Industries, Samsung’s textile subsidiary, with its construction unit Samsung C&T, to take over… Management of the technology giant. Controls in 2015
They were also accused of inflating the stock price of Cheil and Samsung C&T and accounting fraud at Samsung Biologics, in which Cheil had a large stake, as part of the same case. Prosecutors alleged that Samsung had a merger strategy that helped Lee consolidate control and acquire management rights.
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