Decision looms on second arrest of Samsung boss on fraud allegations
A South Korean court is expected to rule today on whether to arrest Samsung Group leader Jay Y. Lee on new allegations including accounting fraud and stock manipulation, two years after completing his last jail sentence.
Prosecutors requested an arrest warrant for Lee last week as part of a probe into a controversial 2015 merger of two Samsung affiliates that they argued helped facilitate Lee’s plan to assume greater control of the group.
Lee was previously jailed for about one year until February 2018 for his role in a bribery scandal. He was accused of giving horses to the daughter of a confidante of former South Korean President Park Geun-hye to win government support for the merger of the two affiliates.
The decision on whether he will be arrested is expected late today or early tomorrow.
The court can then order Lee be detained for 20 days while prosecutors proceed with investigations. After that charges must be filed and the Samsung boss be put on trial.
During a trial, Lee can be detained for up to six months.
The turmoil surrounding Lee, who has led the group since his father’s heart attack in 2014, and other Samsung executives has cast a shadow over the group. Its crown jewel, Samsung Electronics, produces an annual revenue equivalent to 12 per cent of South Korea’s gross domestic product.
Prosecutors on Friday alleged Lee was involved in illegal transactions and stock manipulation that furthered the 2015 merger of the affiliates, Samsung C&T and Cheil Industries.
They also argue he had a role in inflating the value of Samsung Biologics, which counted Cheil Industries as a major shareholder.
The merger was viewed as key to Lee increasing control of the sprawling group, but critics say it ignored the interests of minority investors.
Samsung Group last week denied the allegation of stock-manipulation against Lee, saying it was “beyond common sense” to claim he had been involved in the decision-making.
In a further statement over the weekend, the group said the lengthy probe is weighing on management, which is in “crisis” at a time when the Covid-19 pandemic and US-China trade disputes are adding to uncertainty.