[Full Text] Statement from the Legal Team of Lee Jae-yong, Vice Chairman of Samsung Electronics

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The full statement from the legal team of Samsung Electronics Vice Chairman Lee Jae-yong is as follows.

The charges in this case?violation of the Capital Markets Act, accounting fraud, and breach of fiduciary duty?are unilateral claims by the investigative team that are not based on evidence or legal principles and are absolutely not true.

Through the pre-trial detention hearing and various related court rulings in cases filed by speculative funds such as Elliott, it has been objectively confirmed that the Samsung C&T merger was a legitimate business activity carried out for managerial necessities such as 'compliance with government regulations,' 'stabilization of unstable management rights,' and 'achievement of business synergy effects.' All procedures during the merger process were judged to have been conducted lawfully, thus the charges asserted by the investigative team cannot be considered criminal.

Regarding the accounting fraud allegations against Samsung Biologics, the financial authorities’ stance on accounting treatment has been repeatedly reversed, and twelve accounting experts have expressed opinions that there was no violation of accounting standards. The courts also ruled that it is difficult to view the case as a violation of accounting standards in the suspension of execution case against the Financial Services Commission’s disposition and in the warrant review related to accounting fraud charges.

The Prosecution Investigation Deliberation Committee, composed of experts and ordinary citizens, also carefully examined the claims and evidence from both the investigative team and the defense from a third-party perspective and overwhelmingly decided by a 10 to 3 majority that the case should not be prosecuted and that the investigation should be stopped.

The judgment of the Investigation Deliberation Committee represents the will of the people, and accordingly, the prosecution has respected all eight decisions made by the committee so far. However, this case alone was prosecuted forcibly.

All the contents and evidence explained by the prosecution today were presented and thoroughly reviewed during the pre-trial detention hearing and the Investigation Deliberation Committee’s review process, and there is nothing new worth rebutting.

The prosecution that goes against the will of the people and even ignores the judiciary’s reasonable judgment not only violates legal fairness but also damages public trust in the prosecution itself.

For the defendants who trusted the prosecution’s fair decision-making process and tried to protect their rights during that process, this is utterly incomprehensible and unacceptable.

Furthermore, the charge of breach of fiduciary duty, which was never even mentioned during the warrant request and the Investigation Deliberation Committee’s review, was abruptly added during the prosecution process.

The investigative team had previously been unable to apply this charge considering the consistent Supreme Court precedents that do not recognize breach of fiduciary duty by directors toward shareholders, as well as the fact that the merger resulted in the former Samsung C&T gaining shares in Samsung Biologics worth 53 trillion won in market capitalization. Suddenly adding this charge during prosecution seriously infringes on the defendant’s right to defense and denies the very existence of the Investigation Deliberation Committee.

Also, since it was concluded that there was no manipulation of the merger ratio, not a single line of this was included in the charges. It is difficult to understand criminalizing a normal merger between companies where the ratio was determined by market stock prices according to the law without any manipulation.

The investigative team has repeatedly overstepped by requesting an arrest warrant when applying for the Investigation Deliberation Committee’s review, and after the committee overwhelmingly decided to stop the investigation and not prosecute, they added the breach of fiduciary duty charge, which was never even submitted to the committee.

This attitude of the investigative team can only be seen as conducting the investigation with the predetermined goal of prosecuting Samsung Group and Lee Jae-yong from the start, rather than seeking the substantive truth based on evidence.

Moreover, the charges constructed by the investigative team are identical to the claims made by the speculative fund Elliott, which opposed the Samsung C&T merger, in the ISD arbitration case filed against our government.

Although it is claimed that conclusions were drawn through meetings of chief prosecutors and expert consultations, this is merely a trick to overturn the conclusions of the neutral and objective Investigation Deliberation Committee, which was introduced to democratically control the exercise of prosecutorial power. It is highly questionable how arbitrarily selecting participants and experts and providing only the investigative team’s one-sided claims and materials can justify prosecution.

This is not only unacceptable but also regrettable.

The defendants will sincerely participate in the trial and will reveal one by one in court why this prosecution is unjust.

Looking around, everyone is struggling in great difficulty. Although many hardships are expected for Samsung Group and the defendants due to this prosecution, we will strive to contribute to overcoming the current difficulties as members of society without wavering.

Thank you.

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