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Head of Samsung Conglomerate Facing New Legal Jeopardy

The heir to South Korea’s Samsung empire appeared in a Seoul court Monday for a hearing to decide whether he will be arrested and jailed in connection with a controversial merger.   Lee Jae-yong was silent as he walked through an army of shouting reporters when he arrived at the courthouse. If the court approves the warrant, Lee could be detained and taken into custody. A final decision is expected late Monday night or early Tuesday morning. Prosecutors have accused Lee, the current vice chairman of Samsung Electronics, of stock manipulation and illegal trading during the 2015 merger of two Samsung affiliates, Samsung C&T and Cheil Industries, of which Lee is the largest shareholder. He allegedly sought to inflate the value of Cheil Industries and lower the value of Samsung C&T to give him a bigger stake in the merged company, a move that would give him increasing control of South Korea’s largest conglomerate and smooth the transition from his ailing father, Lee Kun-hee, who suffered a heart attack in 2014.   Lee is also accused of inflating the value of Samsung Biologics, which is a subsidiary of Cheil Industries. Samsung released a statement last week denying the allegations against Lee. Lee was convicted in 2017 for bribing a confidante of then-President Park Geun-hye in return for Park’s support for the 2015 merger, a scandal that forced Park out of office and eventually landed her in prison.  Lee served a year before an appeals court suspended his sentence. South Korea’s Supreme Court ordered a retrial on the original charges. 

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