Prosecutors Re-summon Kim Jong-jung, Former Presidential Office Director, Over Samsung Merger Suspicion

[Asia Economy Reporter Song Seung-yoon] The prosecution investigating the merger allegations between Samsung C&T and Cheil Industries re-summoned former Samsung Future Strategy Office President Kim Jong-jung on the 6th.

The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) summoned and questioned former President Kim in the morning. This was Kim's fourth appearance before the prosecution. The prosecution questioned Kim about various suspicions surrounding the Samsung C&T and Cheil Industries merger, including the overall decision-making process within the group’s top management and whether there was organized involvement at the group level.

The prosecution suspects that Kim, who was the head of the strategy team at the Future Strategy Office during the 2015 Samsung C&T merger, was involved throughout the merger process. They believe that the Samsung Group deliberately lowered Samsung C&T’s company value by reducing performance figures such as overseas construction orders just before the merger to secure a merger ratio favorable to Vice Chairman Lee. It is alleged that the value of Cheil Industries, in which Vice Chairman Lee held shares, was inflated to merge with Samsung C&T, and that accounting fraud was committed at Samsung BioLogics, a Cheil Industries subsidiary, to justify the merger ratio applied favorably to Vice Chairman Lee.

The prosecution is accelerating the investigation into the merger allegations, having summoned former Future Strategy Office Deputy Head Jang Choong-ki and former Head Choi Ji-sung on the same day on the 4th. The prosecution’s summons and investigation are expected to soon extend to Vice Chairman Lee himself.

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