South Korean court denies arrest warrant request for Samsung heir
A South Korean court on Tuesday denied an arrest warrant
request for Samsung Group heir Jay Y. Lee after prosecutors accused him of
accounting fraud and stock manipulation.
The ruling provided temporary relief for the vice chairman
of Samsung Electronics. But he may face further pressure from the case at a
time when the world’s top maker of smartphones and memory chips contends with
the impact of the COVID-19 pandemic on demand.
Shares in Samsung Group affiliates rose broadly in early
Tuesday trade, with Samsung Electronics rising 2%, Samsung BioLogics up 2.4%,
and Samsung C&T climbing 2.2% compared to a 1.2% rise in the benchmark
KOSPI.
Prosecutors last week asked the court to issue an arrest
warrant for the 51-year-old Lee, as part of a probe into alleged accounting
fraud involving a Samsung drugs affiliate and a 2015 merger of two other
affiliates.
They said the fraudulent accounting, and alleged stock
manipulation, helped facilitate Lee’s plan to assume greater control of the
group.
“It appears that prosecutors have secured considerable amount
of evidence through their investigation, but they fell short of explaining the
validity to detain Lee,” the Seoul Central District Court said in a statement.
“Considering the significance of the case, it is appropriate
to determine whether the suspects are responsible and the degree (of their
involvement) through sufficient trials and debates,” the court said.
Prosecutors called the decision regrettable, saying their
investigation would proceed nonetheless. They may decide to reapply for the
arrest warrant request for Lee, after further investigation, or bring Lee to
trial without arrest.
Lee’s attorneys said in a statement they hoped the case
would get a thorough review from an outside panel that would decide whether or
not an indictment of Lee was justified.
The allegations against Lee center on illegal transactions
and stock manipulation that furthered the $8 billion merger of affiliates
Samsung C&T Corp and Cheil Industries in 2015, according to prosecutors.
The merger was seen as key to Lee increasing control of the
sprawling group but critics say it rode roughshod over the interests of
minority investors.
Prosecutors also allege he had a role in inflating the value
of Samsung Biologics Co Ltd, which counted Cheil Industries as a major
shareholder.
Samsung has denied the allegations.
Comments
Post a Comment