Lee Jae-yong, chairman of Samsung Electronics, who was indicted on suspicion of an unfair merger between Samsung C&T and Cheil Industries, arrived at the Seoul High Court around 1:40 p.m. on the 3rd to attend the second trial ruling.
The Seoul High Court's Criminal Division 13, presided over by Chief Judge Baek Kang-jin, will hold a ruling session at 2 p.m. the same day on the appeal trial concerning Chairman Lee and others for violations of the Capital Markets Act, including fraudulent trading and market manipulation as well as breach of fiduciary duty. Previously, the first instance court ruled unanimously in February last year that all 19 charges against Chairman Lee were not guilty.
Samsung Group merged the two companies on the condition of exchanging one share of Cheil Industries for three shares of Samsung C&T in 2015. The prosecution has alleged that the calculation of this merger ratio was conducted excessively to ensure the stable succession of management by Chairman Lee and that it harmed the interests of shareholders, leading to the indictment in September 2020.
The prosecution claimed that, given Chairman Lee held 23.2% of Cheil Industries' equity and Samsung C&T, a shareholder of Samsung Electronics, had no shares, efforts were made at the group level to increase the value of Cheil Industries while lowering that of Samsung C&T to facilitate a favorable merger for him.
To achieve this, the prosecution asserted that illegal activities were carried out, including ▲ spreading false information ▲ concealing important information ▲ announcing false positive news ▲ buying major shareholder stocks ▲ engaging in illegal lobbying to secure national pension voting rights ▲ mobilizing the organization of Samsung Securities, a subsidiary ▲ and manipulating stock prices through concentrated buybacks of its own shares. In the sentencing hearing last November, the prosecution sought a five-year prison term and a fine of 500 million won for Chairman Lee.