Today, Monday 8th June 2020, Samsung’s Lee Jae-yong, or Jay Y. Lee as he is popularly called in the West, faces potential re-arrest after a court hearing. Lee is no newcomer to court summons or even jail time as well.
The charges levelled against Lee Jae-yong accuses him of illegal actions involved in the marriage of Cheil Industries and Samsung C&T. The two Samsung Group companies had been joined in 2015 but it had not been without some controversy. Prosecutors claim that they have proof that link Lee to some fraudulent accounting activities that made the deal possible.
From inception, the acquisition had faced legal battles. For example, in 2015 when Cheil Industries announced its interest in buying Samsung C&T, Elliot Associates had tried blocking the deal and even dragged the executives to court. However, owning only 7.1% of Samsung C&T’s there was very little Elliot Associates could do. In December 2017, the Fair Trade Commission (FTC) of Korea also reviewed the deal.
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In the wake of these recent charges, Samsung has come out to deny allegations relating to stock manipulation. According to a Reuters report, the company said it was “beyond common sense” to claim that Lee had been involved in the trade decisions. It further acknowledged that this new probe would affect the company’s management; which was already under strain due to the pandemic and US-China trade war.
Lee Jae-yong is the eldest child and only son of Lee Kun-hee, the Chairman of Samsung. While Lee Jae-yong currently serves as the Vice-Chairman of Samsung, many have said that he would inherit his father’s chair.
In August 2017, the court sentenced Lee Jae-yong to prison after his arrest over bribery, embezzlement, and perjury. The case had been related to scandals involving Park Geun-hye, the former President of South Korea from 2013 to 2017. Lee Jae-yong got out of prison in February 2018.
If the Court decides that Lee should be rearrested based on Monday’s hearing, Samsung’s heir may spend up to 20 days in detention before the prosecutors have to file charges.
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