Prosecutors Summon Jung Hyun-ho, President of Samsung Electronics Business Support TF

[Asia Economy Reporter Song Seung-yoon] The prosecution investigating the merger allegations between Samsung C&T and Cheil Industries summoned Jung Hyun-ho, head of Samsung Electronics' Business Support TF, on the 14th. This is the first time Jung has been questioned by the prosecution in eight months since June last year.

The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) summoned Jung in the morning for questioning. The prosecution is reportedly focusing on the decision-making process of the group’s top executives during the 2015 merger between Samsung C&T and Cheil Industries.

Jung was previously summoned by the prosecution in June last year on charges of instructing employees to destroy evidence such as accounting data and internal reports related to Samsung BioLogics and Samsung Bioepis, and was questioned for 17 hours. Jung worked as the head of the Management Diagnosis Team and the Human Resources Support Team at the former Samsung Future Strategy Office. He is known to be a close confidant of Vice Chairman Lee, having built a relationship during their studies at Harvard University in the 1990s.

The prosecution believes that Samsung Group deliberately lowered Samsung C&T’s company value by reducing performance such as overseas construction orders just before the merger to set a merger ratio favorable to Vice Chairman Lee. They suspect that Jung was involved in the overall restructuring of the governance system to facilitate Lee’s succession to management while working at the Future Strategy Office. There are also allegations of accounting fraud at the subsidiary Samsung BioLogics to justify the relatively high valuation of Cheil Industries.

Regarding the merger allegations, the prosecution is accelerating the investigation by consecutively summoning top executives of the former Samsung Future Strategy Office, including Kim Jong-joong, former president, Jang Choong-ki, former deputy head, and Choi Ji-sung, former head. The prosecution is expected to summon Vice Chairman Lee soon.

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