Lee Jae-yong's 'Unfair Merger and Accounting Fraud' First Trial Verdict Postponed to Next Month 5th

Court Changes Sentencing Date Originally Set for the 26th
Prosecution Seeks 5-Year Prison Term and 500 Million Won Fine

The sentencing trial for Samsung Electronics Chairman Lee Jae-yong's case involving unfair merger and accounting fraud, originally scheduled for the 26th of this month, has been postponed to early next month.

Lee Jae-yong, Chairman of Samsung Electronics. Photo by Younghan Heo younghan@

According to the legal community on the 22nd, the Seoul Central District Court Criminal Division 25-2 (Presiding Judges Park Jeong-je, Ji Gwi-yeon, Park Jeong-gil) changed Chairman Lee's sentencing date from the 26th to the 5th of next month.

Chairman Lee and others were indicted in September 2020 on charges of violating the Capital Markets Act and breach of fiduciary duty related to the merger process between Samsung C&T and Cheil Industries.

Samsung C&T and Cheil Industries merged in May 2015 after board approval, exchanging one share of Cheil Industries for about three shares of Samsung C&T. Chairman Lee (then Vice Chairman), who held a 23.2% stake in Cheil Industries, secured a stable stake in the integrated holding company Samsung C&T after the merger, thereby strengthening his control over the group.

The prosecution judged that during this process, the group’s strategic planning office led various fraudulent transactions such as spreading false information, concealing important information, announcing false favorable news, purchasing shares from major shareholders, illegal lobbying to secure voting rights of the National Pension Service, and market manipulation through concentrated repurchase of treasury stocks, aiming to inflate Cheil Industries' stock price and depress Samsung C&T's stock price.

As a result, Samsung C&T's corporate value was not properly evaluated, causing losses to investors, according to the prosecution. Additionally, the prosecution identified Samsung C&T directors as the main actors of breach of fiduciary duty and pointed to Chairman Lee as the instigator or accomplice. Chairman Lee and others are also charged with accounting fraud related to Samsung BioLogics, a subsidiary of Cheil Industries.

In the sentencing hearing on November 17 last year, the prosecution requested a prison term of five years and a fine of 500 million won for Chairman Lee.

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