Logo of Phnom Penh Post newspaper Phnom Penh Post - Samsung’s Lee Jae-yong avoids arrest




Samsung’s Lee Jae-yong avoids arrest

Content image - Phnom Penh Post
Lee Jae-yong is already being re-tried on other offences in connection with a corruption scandal that brought down former South Korean President Park Geun-hye. YONHAP NEWS AGENCY/AFP

Samsung’s Lee Jae-yong avoids arrest

A South Korean court on Tuesday declined to issue an arrest warrant for the heir to the country’s Samsung empire over a controversial merger of two business units seen as a key step to his succession.

Lee Jae-yong, the vice-chairman of Suwon-based multinational electronics company Samsung Electronics Co Ltd, is already being re-tried on charges of bribery, embezzlement and other offences in connection with a corruption scandal that brought down former South Korean President Park Geun-hye.

The merger case is separate from his ongoing retrial, but adds to the difficulties for the Samsung group, by far the biggest of the family-controlled conglomerates, or chaebol, that dominate business in the world’s 12th-largest economy.

Prosecutors had sought the arrest warrant for Lee on suspicion he was involved in price manipulation and illegal trading during the 2015 merger of Cheil Industries Inc and Samsung C&T Corp.

But the Seoul Central District Court turned down the prosecution’s request, ruling that there was not sufficient probable cause for his arrest or those of two former Samsung executives.

Judge Won Jung-sook said in a court statement: “There was insufficient explanation on the need to arrest the defendants against the principle of trial without detention.

“Prosecutors seem to have already secured a considerable amount of evidence through their investigation.”

Whether Lee committed illegal acts should be established at trial, she added.

Lee attended the hearing, which Yonhap News Agency said lasted for about nine hours, and then awaited the court’s decision at a detention centre. He emerged at about 2:40am on Tuesday and briefly greeted reporters but did not answer when asked how he felt about the decision.

Lee then left in a black sedan.

The merger transaction was seen as helping ensure a smooth third-generational power transfer to Lee, a scion of Samsung’s founding family.

Chaebol families often have only a small ownership stake in their empires, but maintain control through complex webs of cross-shareholdings between units.

Lee was the largest shareholder in Cheil Industries, and critics say Samsung sought to artificially lower the price of C&T to give him a bigger stake in the merged entity – a key part of the Samsung structure – consolidating his grip on the conglomerate.

Last week, the Samsung group rejected media reports of price manipulation as “groundless”, saying in a statement Lee did not take part in “any illegal acts”.

The prosecutors’ request came weeks after Lee issued a wide-ranging apology for company misconduct and promised to end the line of family succession.

Lee, 51, has effectively been at the helm of Samsung – South Korea’s biggest business group – since his father and Samsung group boss Lee Kun-hee suffered a heart attack in 2014.

He was jailed for five years in 2017 in connection with Park’s corruption scandal but was released a year later on appeal before the country’s top court ordered him to face a new trial.

Samsung’s overall turnover is equivalent to a fifth of the national gross domestic product, making it crucial to South Korea’s economic health.

The company reported a slight fall in first-quarter net profit at 4.88 trillion won ($4 billion), citing the impact of the coronavirus pandemic.

But Samsung – which saw operations suspended at 11 overseas assembly lines – has warned of further falls to come as consumer demand is “significantly” hit by the disease.

MOST VIEWED

  • Hungarian exposes 90 to Covid in Siem Reap

    The Ministry of Health has discovered 90 people who have been exposed directly or indirectly to a Hungarian man infected with Covid-19. They all are required to quarantine at home and the hospital. The ministry is searching for other affected people. Among the 90, one is the

  • PM: West unfair to Cambodia

    Prime Minister Hun Sen released a message celebrating the International Day of Peace on Monday, saying that some major powers and western countries had been systemically cooperating to put political pressure on Cambodia as they did in the 1970s and 1980s. Hun Sen said pressuring

  • ‘Bad news is an investor’s best friend’ – unlocking investment potential in Cambodia

    It is time to shop. Economic woes provide good pickings for investors if they know where to look The poem If, written by English Nobel laureate poet and novelist Rudyard Kipling for his son circa 1895, is widely perceived as fatherly advice for John who would

  • PM requests Russia’s Covid vaccine

    Prime Minister Hun Sen has requested that Russia provide Cambodia with its Covid-19 vaccine after the former announced it planned on mass vaccinating its population next month. The request came on Thursday through the prime minister’s Facebook page as he met with Anatoly Borovik,

  • First ‘mobile kitchen’ in Cambodia enters service

    A catering company recently rolled out Cambodia’s first “mobile kitchen” – a $50,000 container capable of serving up to 200 people at a time. The kitchen is the brainchild of Seng Hok Heng Catering Services. At 4.4m-high, 6.8m-long and 2.4m-wide (expandable to 6.8m), the kitchen is equipped

  • Kingdom, China rebut basis for US sanctions

    The Council for the Development of Cambodia, the Ministry of Foreign Affairs and International Cooperation, and Tianjin Union Investment Development Group Co Ltd (Tianjin) have responded to US sanctions on Union Development Group Co Ltd (UDG), a Chinese-owned company currently developing the sprawling $3.8 billion Dara