SEOUL (Reuters) – The de facto chief of Samsung Group, Jay Y. Lee, appeared ahead of a South Korean court on Monday, awaiting a ruling on whether or not new allegations which include accounting fraud and inventory manipulation will deliver him back again to jail immediately after extra than two years of independence.
Samsung Group heir Jay Y. Lee arrives for a court hearing to review a detention warrant request in opposition to him at the Seoul Central District Court in Seoul, South Korea, June eight, 2020. REUTERS/Kim Hong-Ji
Prosecutors on Thursday requested the courtroom to challenge an arrest warrant towards Lee, culminating a probe into a controversial 2015 merger of two Samsung affiliates that they stated aided aid Lee’s system to assume better management of the team.
The chance of additional jail time for Lee who has led the group due to the fact his father’s heart attack in 2014, has solid a pall more than the sprawling conglomerate and its crown jewel, Samsung Electronics Co, whose annual profits by yourself is equal to 12% of South Korea’s gross domestic solution.
Lee, 51, carrying a experience mask and a dark fit, appeared at the Seoul court docket for a hearing that started at 10: 30 a.m. (0230 GMT). He did not response thoughts from reporters just before entering the court.
Soon after the listening to, he is predicted to head to a detention centre to await the judge’s determination, predicted on Monday or early Tuesday.
Prosecutors have accused Lee of getting involved in illegal transactions and inventory manipulation that furthered the 2015 merger of Samsung C&T and Cheil Industries. They also allege he had a job in inflating the price of Samsung Biologics Co Ltd, which counted Cheil Industries as a significant shareholder.
The merger of the two affiliates was viewed as essential to Lee growing control of the sprawling team but came less than hearth by critics who mentioned it rode roughshod in excess of the pursuits of minority investors.
Samsung on Friday denied the allegation of stock-manipulation from Lee, expressing it was “beyond widespread sense” to claim Lee was concerned in the determination-earning.
In a further more statement around the weekend, the group reported the prolonged probe is weighing on management, which is in “crisis” at a time when the coronavirus pandemic and U.S.-China trade disputes are incorporating to uncertainty.
The firm declined to make Lee available for comment.
“If he is arrested, this will even more hurt the status of Lee and Samsung. There will additional concerns about his legitimacy as the CEO and successor of the company,” explained Chang Sea-jin, enterprise professor at Korea Innovative Institute of Science & Technology.
Lee was jailed for about a person year until finally Feb. 2018 for his purpose in a bribery scandal in which he was accused of giving horses as presents to the daughter of a confidante of former President Park Geun-hye to acquire govt assist for the merger of the two affiliate marketers.
South Korea’s Supreme Courtroom has considering that overturned a reduce court docket determination to suspend his sentence. It is unclear when there will be a new court docket ruling around no matter whether he will have to provide further jail time for that conviction.
In South Korea, economic energy is very concentrated in quite a few chaebol or conglomerates, most of which have operate into controversy over succession issues. At Samsung, prior to his father’s heart assault, Jay Y. Lee experienced only modest stakes in numerous affiliates that elevated the possibility he could shed regulate of the group to other shareholders.
Reporting by Hyunjoo Jin and Heekyong Yang Modifying by Edwina Gibbs