PROSECUTORS INDICT SAMSUNG HEIR LEE JAE-YONG

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Prosecutors who have been investigating Samsung Group's suspected illegal succession of managerial control have indicted the group's heir Lee Jae-yong. The prosecution said Samsung, on a group level, committed various systematic illegalities for the personal profit of the top executive, that is managerial succession.

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​"The goal was to secure Samsung Electronics vice chairman Lee Jae-yong's control over Samsung Group at the minimum cost." This was the conclusion reached by prosecutors regarding the 2015 merger between Samsung C&T and Cheil Industries. The prosecution believes Samsung, on a corporate level, carried out various illegal acts to achieve this goal, and Lee was heavily involved in the process. Samsung's de-facto chief faces three main charges: violating capital market and external audit laws as well as breach of trust. But the indictment indicates 16 detailed alleged crimes. Lee is accused of promising economic benefits for KCC which was the second largest shareholder of Cheil Industries, in a bid to realize the merger. Prosecutors believe the tech giant lobbied Choi Soon-sil, the long time confidant of former President Park Geun-hye, to exert impact on the national pension fund, the largest shareholder of Samsung C&T. During the merger process, Samsung is also suspected of announcing false information such as development plans near Everland theme park and stock listing plans of affiliates in order to shore up share prices of Cheil Industries. The prosecution also believes Lee borrowed 420 billion won to purchase the company's own shares to boost the stock value.

[Soundbite] LEE BOK-HYEON(SEOUL CENTRAL DISTRICT PROSECUTORS' OFFICE) : "Unfavorable information was concealed while various illegal transactions such as bribing shareholders, lobbying and stock price manipulation were carried out systematically."

Prosecutors also point to systematic activities that were aimed at disrupting law enforcement such as large-scale evidence destruction and bearing false witness during the trial on the presidential influence peddling scandal. Along with Lee, prosecutors also referred to trial, ten former and incumbent Samsung executives including Choi Gee-sung who had led the group's now-disbanded Future Strategy Office. An independent committee of outside experts recommended against indicting Lee. However, prosecutors said they thoroughly reviewed their probe following that advice but decided to indict him considering the serious nature of the case that disturbed capital market order.