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Samsung Chief Grilled over Succession Fiddle

by srsuri2017

Samsung chief Lee Jae-yong was grilled again by the Seoul Central District Prosecutors’ Office on Tuesday on suspicions of breach of trust and accounting fraud in a complex fiddle to pass control of the sprawling conglomerate to him.

The last time Lee was questioned by prosecutors was in January of 2017 in the massive bribery and corruption scandal involving former President Park Geun-hye.

Lee has been convicted of bribing Park to facilitate the fiddle, which bypassed due procedure to allow Lee to take over control of the publicly traded conglomerate from his comatose father.

The current case revolves around two major charges. The first is financial irregularities in the 2015 merger of Samsung C&T and Cheil Industries, which paved the way for Lee to assume management control through the conglomerate’s Byzantine holding structure after his father fell into a coma following a massive heart attack in 2014.

Lee at the time owned a 23.3 percent stake in Cheil Industries but none in Samsung C&T. Yet each Samsung C&T stake was calculated as equal to just 0.35 Cheil Industries stakes in the merger, and prosecutors believe that Samsung intentionally inflated the value of Cheil Industries and understated the value of Samsung C&T, thereby causing damage to other shareholders.

The second charge focuses on allegations of a W4.5-trillion accounting fraud involving Samsung Biologics, a key affiliate of Cheil Industries. Prosecutors suspect Samsung hid the debts of subsidiary Samsung Bioepis to inflate the value of Samsung Biologics.

Samsung denies the charges and insists that the accounting work was completed after the merger in 2015.

Prosecutors grilled Lee about his role in or knowledge of the ruses.

Earlier, the Supreme Court in a unanimous decision noted that an “organized campaign” was conducted to hand over control of the conglomerate from father to son, and that Lee bribed Park to facilitate it. But the Supreme Court was not asked to delve into any other irregularities that occurred in the process.

Lee denies knowledge of any wrongdoing.

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