Samsung Legal Team: "No Proof of Criminal Charges. Expecting Strict Investigation Review"

Lee Jae-yong, Vice Chairman of Samsung Electronics, who is under prosecution investigation for allegations of unfair succession of management rights related to the merger of the former Samsung C&T and Cheil Industries, as well as accounting fraud allegations involving Samsung Biologics, is entering the courtroom to attend the warrant hearing held at the Seoul Central District Court in Seocho-gu, Seoul, on the morning of the 8th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Choi Seok-jin] The prosecution investigating allegations related to the merger between Samsung C&T Corporation and Cheil Industries has had the arrest warrants requested for Samsung Electronics Vice Chairman Lee Jae-yong (52), former Samsung Future Strategy Office chief Choi Ji-sung (69), and former Future Strategy Office strategy team leader Kim Jong-joong (64) all dismissed on the 9th. In response, Samsung's legal team stated that this reflects "the fact that the criminal charges were not substantiated."

Immediately after the court's decision to dismiss the warrants, the defense lawyers representing Vice Chairman Lee and others said, "The court's reason for dismissal is that 'aside from the basic facts, the responsibility of the suspects and the criminal charges were not substantiated, and there is no necessity for detention,'" adding, "We hope that through a strict review process in the upcoming prosecution investigation review committee, the continuation of the investigation and the decision on prosecution will be determined."

Regarding the dismissal reason given by Seoul Central District Court Judge Won Jeong-sook, who conducted the pre-arrest detention hearing (warrant substantive examination) for the three suspects, stating that "the basic facts have been established," but "there is insufficient evidence to justify the necessity and appropriateness of detaining the suspects contrary to the principle of non-detention," it is interpreted that the court found the prosecution's evidence for criminal charges insufficient.

Furthermore, since the warrants were dismissed, Samsung intends to have the prosecution investigation review committee (Investigation Review Committee), which it requested to convene, rigorously examine not only the decision to prosecute but also the appropriateness of the prosecution continuing the investigation.

In fact, with all three arrest warrants requested by the prosecution being dismissed, a re-examination of the prosecution's legal theory regarding Samsung BioLogics' accounting fraud and the fraudulent transactions during the merger process between the two companies has become necessary.

Also, the likelihood of the Investigation Review Committee, which Samsung requested to assess the validity of prosecution, being convened has increased.

The Seoul Central District Prosecutors' Office plans to hold a referral review committee on the 11th to discuss referring Vice Chairman Lee's case to the Investigation Review Committee.

If the arrest warrant for Vice Chairman Lee had been issued, even if the referral review committee voted to refer the case for review, it would have had little significance. However, given the current situation where the warrant was dismissed, the opinion the Investigation Review Committee will provide regarding prosecution in this case has become more meaningful, increasing the likelihood that the referral review committee will decide to refer the case.

The referral review committee, composed of 15 Seoul Central District Prosecutors' Office citizen prosecutors, reviews whether to refer the case to the Investigation Review Committee based on written opinions submitted by the lead prosecutor and the suspects or other related parties.

If the referral review committee, which is conducted privately, approves the referral to the Investigation Review Committee by a majority vote of attending members, it sends a request to convene the committee to the Prosecutor General.

Subsequently, the current affairs committee, consisting of 15 members, deliberates on the matter with at least 10 members participating and prepares a review opinion report on the results, which is sent to the lead prosecutor.

According to related guidelines, regarding the effect of the review, "the lead prosecutor must respect the review opinion of the current affairs committee," so while it is not legally binding, the investigation team inevitably faces pressure when making decisions that contradict the Investigation Review Committee's opinions.

The prosecution is expected to decide whether to reapply for the warrants for Vice Chairman Lee and others or to indict them without detention after reviewing the court's reasons for dismissing the warrants.

The Seoul Central District Prosecutors' Office Economic Crime Division (Chief Prosecutor Lee Bok-hyun), which has been investigating this case, requested arrest warrants on the 4th for Vice Chairman Lee, former chief Choi, and former team leader Kim on charges of violating the Capital Markets Act (fraudulent trading and market manipulation) and the Act on External Audit of Stock Companies. Former President Kim was also charged with perjury.

From 10:30 a.m. to around 9:20 p.m. the previous day, Judge Won conducted the warrant substantive examination for Vice Chairman Lee, former chief Choi, and former team leader Kim, and at around 2 a.m. on the same day, dismissed all three arrest warrants.

Judge Won stated, "The basic facts have been established, and it appears that the prosecution has already secured a considerable amount of evidence through its investigation," but added, "However, there is insufficient evidence to justify the necessity and appropriateness of detaining the suspects contrary to the principle of non-detention. Considering the importance of this case, it is appropriate that the responsibility and degree of the suspects be determined through sufficient debate and examination during the trial process," explaining the reason for dismissal.

This content was produced with the assistance of AI translation services.