Samsung Heir Lee Jae-yong faces fresh charges of fraud over 2015 merger deal

Samsung heir Lee Jae-yong has been indicted by South Korean prosecutors over a controversial merger of two business units in 2015. The prosecutors accused Lee, vice chairman of Samsung Electronics, of committing stock manipulation and breach of trust to gain control of the Samsung Group. 

The prosecutors alleged that Lee and other current and former Samsung executives carried out a systemic scheme to take control of the Samsung Group at the least cost. In order to achieve the goal, they allegedly deployed various unfair transactions, damaging the interests of other stakeholders. 

Lee was found guilty on separate charges in 2017 over the controversial merger of two Samsung businesses, Samsung C&T and Cheil Industries. He was tried on charges related to a corruption scandal that led to the impeachment of former South Korean President Park Geun-Hye. The South Korean business magnate was sentenced to five years in prison but was later suspended by an appeals court in 2018. According to media reports, it is unlikely that Lee will be held in police custody as he awaits trial on the latest indictment. 

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In June, the prosecution was seeking an arrest warrant for Lee and two other former employees of the company over an alleged accounting fraud. They suspected that Lee inflated the value of one of his companies before merging it with Samsung C&T. Lee was the biggest shareholder in Cheil Industries, an electronic components provider before it merged with Samsung in 2015. 

Public apology

Lee had recently issued a public apology for his company's role in the 2017 scandal that shook South Korea, promising to not pass the company's control on to his children. Speaking at a briefing in Samsung headquarters in Seoul, Lee admitted his wrongful conduct in the past and pledged not to misuse his powers in the future.

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(Image: AP)