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Samsung Electronics Chairman Lee Jae-yong attends the final hearing of a retrial related to a controversial 2015 merger at Seoul Central District Court in Seoul on Monday. (Yonhap) |
Prosecutors requested five years in prison and a fine of 500 million won ($356,000) for Samsung Electronics Chairman Lee Jae-yong on Monday, in the final hearing of a retrial over suspected stock manipulation related to a high-profile 2015 merger case.
The prosecution had appealed in February immediately after a lower court acquitted Lee of all 19 charges it had filed.
In the appellate court on Monday, the prosecution kept to their original claims, insisting the chief of the country's largest conglomerate rigged the company valuation and falsified accounting records in the merger of two Samsung affiliates, Cheil Industries and Samsung C&T Corp. in 2015.
Indicting 12 other Samsung executives on the same charges, the prosecution claimed the criminal actions were aimed at strengthening the Samsung chief's control over the business empire at a lower cost.
"In this case, the accused damaged the constitutional value that upholds the justice of our economy and builds the fundamentals of the capital market," the prosecutors said during Monday's hearing.
"When the merger process became unclear and faced strong backlash from shareholders, the defendants deceived them by claiming the merger would serve the national interest."
The prosecutors urged the court to reconsider the acquittal, saying the case would set the precedent for future rulings on chaebol group restructuring and accounting management.
"To indulge the defendant would be to give controlling shareholders free rein to pursue mergers by unlawful means," the prosecutors added.
In the appeals case, the prosecutors have submitted about 2,300 new pieces of evidence.
In 2015, Samsung C&T and Cheil Industries were merged in the interest of business synergy, but the 1:0.35 share swap ratio faced resistance from Samsung C&T shareholders due to its low valuation.
At the time of the merger, Lee Jae-yong held 23.3 percent of shares in Cheil Industries. After the merger, he and his family secured a combined 39.9 percent shares in the merged entity, Samsung C&T, which now serves as the group’s de facto holding unit.
His increased control over Samsung companies raised questions about the merger plan, leading to Lee’s indictment. Lee denied all the charges.
In February this year, the lower court acquitted Lee, citing a lack of evidence. Prosecutors immediately filed an appeal.
The final ruling in the retrial is expected before the court's personnel reshuffle in February next year.
