South Korean prosecutors on Thursday sought an arrest warrant for Samsung Group heir Lee Jae-yong in an investigation of a 2015 case of merger and alleged accounting fraud. The investigations are linked to an alleged accounting fraud by Jae-yong in a suspected bid to help his succession plans.
The move is the latest in the series of legal cases over whether company executives orchestrated moves to transfer power at Samsung Electronics to Jae-yong. This is only going to make things difficult for Jae-yong, who already faces trial on a charge of bribery aimed at winning support to succeed ailing group patriarch Lee Kun-hee.
More Trouble for Jae-yong
On Thursday, South Korean prosecutors sought arrest warrants against Jae-yong and two other former Samsung executives in a 2015 case linked to allegations of a $3.9 billion accounting fraud. The prosecutors said the warrant against Lee was sought on suspicions of stock price manipulation, among other offences.
This once again spells trouble for Jae-yong, who if arrested, would return to jail within two years of being released from detention in 2018. There are a number of legal cases against the de facto head of Samsung that includes charges of bribery to win support in a bid to succeed the Kun-Hee, and which also involved former President Park Geun-hye.
The Seoul Central District Court will review the prosecution's request on June 8. Jae-yong's lawyers expressed "deep regret" in a statement over the prosecutors' move seeking an arrest warrant. They also mentioned that Jae-yong had fully cooperated with the investigations.
More Into the Allegations
Jae-yong was in detention for over a year till the bribery case was suspended in 2018. This time around, the two other former employees have denied the allegations. South Korean regulators had earlier alleged that in 2015 a few employees at Samsung BioLogics, a Samsung group company, inflated the value of another affiliate, Samsung Bioepis, by as much as $3.9bn.
Following that, in December, eight employees from different Samsung companies were found guilty of destroying evidence linked to the investigations. However, Samsung BioLogics has denied claims of accounting fraud. The allegations once again bring to spotlight the opaque governance and succession at Samsung, South Korea's largest company as it struggles with manufacturing disruptions and declining customer demand due to the coronavirus pandemic.
Jae-yong, the 51-year-old son of Kun-hee, has been leading Samsung following his father's heart attack in 2014. Lee was jailed in 2017 because of the bribery and fraud case but was released in 2018. Last month, he made a public apology as he sought to avoid returning to prison on charges of bribery linked to former South Korean president Park Geun-hye. However, Jae-yong's troubles seem far from over as he seems to get entangled in a legal war once again with the country's regulators.