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Court to mull whether to jail embattled Samsung heir again

Samsung on Friday denied the stock-manipulation allegation against Lee
  • Reuters (New Zealand Reseller News)
  • 08 June, 2020 09:43

A South Korean court will rule as soon as Monday whether to send Samsung Group heir Jay Y. Lee back to jail after more than two years of freedom, as new allegations dog the executive and cast a pall over the country's top conglomerate.

Lee, 51, is scheduled to appear in the Seoul Central District Court on Monday, then head to a detention centre to await the judge's decision, expected as early as same day.

Prosecutors on Thursday asked the court to issue an arrest warrant against Lee on suspicion of stock-price manipulation, audit-rule violations and other offences, culminating a probe into accounting fraud and a contentious 2015 merger of two Samsung affiliates that they said helped smooth Lee's succession.

Samsung on Friday denied the stock-manipulation allegation against Lee, saying it was "beyond common sense" to claim Lee was involved in the decision-making.

In a further statement over the weekend, the group said the lengthy probe is weighing on management, which is in a “crisis” at a time when Covid-19 and U.S.-China trade disputes are adding to uncertainty.

Samsung said "groundless, incorrect and speculative media reports" about Lee would “never be desirable, not only for Samsung but for the future of the Korean economy."

The company declined to make Lee available for comment.

He served in jail for about one year until Feb. 2018 for his role in a bribery scandal involving former President Park Geun-hye.

He is also on trial on charges that he gave horses as gifts to win government support for the merger that increased his control of the group - and of its crown jewel, Samsung Electronics Co, South Korea's biggest company - as he was preparing to succeed from his ailing father, Lee Kun-hee.

"If he is arrested, this will further hurt the reputation of Lee and Samsung. There will more questions about his legitimacy as the CEO and successor of the company," Chang Sea-jin, business professor at Korea Advanced Institute of Science & Technology. "The public would think, 'Oh he may have done something wrong again.'"

(Reporting by Hyunjoo Jin; Additional reporting by Heekyong Yang; Editing by William Mallard)