Prosecutors Re-summon Former Samsung Miwon Office President Kim Jong-jung for Investigation... Related to 'Cheil Industries Merger' Allegations

[Asia Economy Reporter Choi Seok-jin] The prosecution, investigating the accounting fraud allegations against Samsung Biologics (Samsung Bio) and the merger process between Samsung C&T and Cheil Industries, has summoned former Samsung Future Strategy Office President Kim Jong-jung (64) for further questioning.

The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Bok-hyun) has been questioning former President Kim since the morning of the 23rd. Kim was previously summoned and questioned by the prosecution more than four times in January and February.

The prosecution is focusing on questioning Kim about the purpose within the group and the decision-making process behind the 2015 merger between Samsung C&T and Cheil Industries.

In July 2017, Kim appeared as a witness in the trial of former President Park Geun-hye and Choi Seo-won (formerly Choi Soon-sil), testifying that the merger between Samsung C&T and Cheil Industries was not pursued to facilitate the succession of management rights or strengthen control by Samsung Electronics Vice Chairman Lee Jae-yong (52).

At that time, Kim stated regarding the merger background, "After Cheil Industries was listed, it sought growth strategies but had no overseas infrastructure at all," adding, "Therefore, the merger with Samsung C&T, which had the second strongest overseas infrastructure in the group after Samsung Electronics, was pursued."

He also testified, "There was also the purpose of incorporating Samsung's new bio-industry business," and "Cheil Industries and Samsung C&T held similar shares in Samsung Bio, and I understand that President Yoon Joo-hwa proposed this to Samsung C&T."

However, the prosecution suspects that at the time of the merger, Samsung C&T deliberately lowered the company's value to favor Vice Chairman Lee, who was the major shareholder of Cheil Industries.

The prosecution has been summoning and questioning current and former senior Samsung executives this year, including summoning Kim Tae-han, CEO of Samsung Biologics (63), for questioning yesterday.

The prosecution is reportedly planning to conclude the investigation into the merger allegations by next month and decide on the prosecution of key suspects.