Prosecutors Likely to Indict Vice Chairman Lee Jae-yong and Others Together... Today’s Announcement of Investigation Results on Samsung Merger and Succession Allegations

Choi Ji-sung, Kim Jong-jung, Kim Tae-han Likely to Be Prosecuted Together
Charges of Violating Capital Markets Act and External Audit Act
First Case Not Following Prosecutorial Investigation Deliberation Committee Recommendation

On June 8, Lee Jae-yong, Vice Chairman of Samsung Electronics, is entering the courtroom to attend the warrant hearing at the Seoul Central District Court in Seocho-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Choi Seok-jin] The prosecution, which has been investigating allegations surrounding the merger between Samsung C&T and Cheil Industries, is expected to collectively indict Vice Chairman Lee Jae-yong of Samsung Electronics and other related parties on the 1st, and announce the final investigation results.

Although the prosecution chose to seek the court's judgment, contrary to the 'non-prosecution' recommendation by the Prosecution Investigation Deliberation Committee composed of external experts, it is difficult to guarantee a conviction during the trial process as opinions among accounting experts are divided regarding the legality of Samsung Biologics' accounting treatment.

The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) plans to non-detain indict about 10 current and former executives, including Vice Chairman Lee, former head of Samsung Future Strategy Office Choi Ji-sung (Vice Chairman), former Deputy General Manager Jang Chung-gi (President), former Strategy Team Leader Kim Jong-jung (President), and Samsung Biologics CEO Kim Tae-han, on charges of violating the Capital Markets Act (fraudulent trading and market manipulation) and the External Audit Act (violation of accounting standards, preparation and disclosure of false financial statements), and then announce the final investigation results.

After filing the indictment with the court, Chief Prosecutor Lee, who led the investigation, plans to hold a brief press briefing at 2 p.m. at the Seoul High Prosecutors' Office press room in Seocho-dong, Seoul, to present the key points of the investigation results and answer questions from the press.

The maintenance of the indictment against Vice Chairman Lee and others is expected to be led by Deputy Chief Prosecutor Kim Young-chul, who participated in the earlier Samsung investigation, at the newly established Special Trial Team 2 of the Seoul Central District Prosecutors' Office, created in the Ministry of Justice's personnel reshuffle on the 27th of last month.

The prosecution began this investigation in December 2018 following complaints filed by the People's Solidarity for Participatory Democracy and the Financial Services Commission regarding accounting fraud at Samsung Biologics, and has conducted the investigation over a lengthy period of 1 year and 9 months.

During this process, the prosecution requested arrest warrants twice for CEO Kim of Samsung Biologics and once for Vice Chairman Lee, but the court dismissed all requests on the grounds that there was 'room for dispute.'

Furthermore, at the Investigation Deliberation Committee meeting held on June 27, an overwhelming majority of members recommended 'suspension of investigation' against Vice Chairman Lee and 'non-prosecution' for all related parties; however, the prosecution subsequently summoned accounting experts for further investigation, supplementing the investigation team's existing arguments, and conducted additional investigations for over two months to create grounds for not accepting the committee's recommendations.

Having previously followed the Investigation Deliberation Committee's recommendations in eight cases, the prosecution's refusal to accept this recommendation, which contradicts the investigation team's position, has drawn criticism for rendering the system it introduced to prevent the abuse of exclusive prosecution rights meaningless.

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