Interest in the Arguments Lee Jae-yong's Side Will Present at the Current Issues Committee After Securing 2 Consecutive Wins

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 8th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Ki-min Lee] Attention is focused on the arguments that Samsung Electronics Vice Chairman Lee Jae-yong and others will present at the Prosecutors' Investigation Deliberation Committee's Special Committee, following two consecutive wins at the detention warrant dismissal and the Subcommittee. To persuade the Special Committee, which is composed of legal experts, not only an explanation of the facts but also legal arguments are essential.

According to business and legal circles on the 11th, Lee's legal team stated after the Subcommittee concluded the previous day, "We will do our best to prepare for the upcoming Prosecutors' Investigation Deliberation Committee hearings," and immediately began preparations for the Special Committee procedures. Unlike the Subcommittee of the Citizens' Committee, the Special Committee is composed of 15 members selected from about 250 individuals with experience in the judicial system, including legal professionals, academics, and media representatives who make up the Investigation Deliberation Committee. Notably, the Special Committee requires not only reviewing written opinions but also attendance by prosecutors and the accused for oral statements and Q&A sessions.

The biggest issue at the Special Committee will be whether the 2015 merger of Samsung C&T and Cheil Industries and the accounting changes at Samsung BioLogics are related to Lee's succession of management rights. The prosecution views the merger of Samsung C&T and Cheil Industries and the accounting changes at Samsung BioLogics as part of efforts to secure Lee's management succession. They argue that the merger ratio was justified by inflating the value of Cheil Industries, in which Lee holds a high stake, and lowering Samsung C&T's stock price, constituting fraudulent transactions and market manipulation.

On the other hand, Samsung's position, including Lee's, is that the merger of Samsung C&T and Cheil Industries was not a succession maneuver but an unavoidable business adjustment in response to policies such as the separation of banking and commerce and the prohibition of circular shareholding, which were Samsung-tailored regulations under the Park Geun-hye administration. Samsung has also maintained that the call option related to Biogen does not violate accounting standards. Accordingly, Samsung plans to argue that it cannot acknowledge the criminal allegations constructed by the prosecution and that the prosecution's indictment is unjustified.

Regarding the allegations of intentional accounting fraud at Samsung BioLogics, Samsung plans to counter by stating, "The accounting treatment of Samsung BioLogics cannot be conclusively deemed fraudulent, which contradicts the conclusions of several civil and criminal court rulings," and "Most legal professionals and experts also question the investigation team's judgment." Therefore, Samsung is reportedly reviewing similar precedents and interpretations by other experts.

A legal insider said, "The experts participating in the Special Committee have closely observed Lee's related allegations and similar cases," adding, "The prosecution and Lee will submit not only an overall outline but also legal arguments and precedents that exploit the opponent's weaknesses to persuade the Special Committee."

Meanwhile, Samsung is also said to have included in their written opinion the reasons for the dismissal of the detention warrants for Lee and others by Judge Won Jeong-sook, head of the warrant division at the Seoul Central District Court, to persuade the Citizens' Committee held the previous day. Judge Won unusually expressed in the warrant review decision that the 'facts are acknowledged' rather than 'charges' being recognized. While the prosecution's stance is that "clarification of facts, securing substantial evidence, and confirmation in trial all amount to 'proof of charges,'" Samsung rebutted by saying, "The facts are understood, but the prosecution has failed to prove that Lee is guilty."

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