Lee Jae-yong. Picture: REUTERS/LEE JAE-WON
Lee Jae-yong. Picture: REUTERS/LEE JAE-WON

Seoul — South Korea’s prosecutors have indicted Samsung Electronics’ de facto leader Lee Jae-yong on allegations including stock manipulation, potentially putting the head of the world’s largest electronics corporation on trial for years.

The Seoul central district prosecutors’ office indicted 11 people including Lee and former Samsung executives, prosecutors said in a statement. Charges include the violation of capital market laws and the audit law, as well as breach of duty.

The decision to indict Lee defies the recommendation of a civil panel and adds to the legal challenges for the country’s most valuable company. Such trials can take as long as 18 months and could stretch another two years if the case is ultimately decided by the country’s top court.

Lee has been embroiled for years in legal scandals that rocked the country and led to the impeachment of former president Park Geun-hye. Special prosecutors first indicted him in early 2017 on charges of bribery and corruption, alleging Samsung provided horses and other payments to a confidant of Park in exchange for government support in his succession. He spent about a year in jail before going free in February 2018.

But in August 2019, the supreme court overturned the lower court’s decision to suspend the mogul’s sentence and ordered a retrial. The new indictment is related to and centres on whether Lee and Samsung used illegal means to help him take control of the group founded by his grandfather.

The prosecutors’ decision comes weeks after a panel of 13 citizens recommended that prosecutors stop their probe into Samsung’s succession and not indict Lee. The panel’s decision was not binding, but reflected at least some public support for the country’s most important company.

Samsung’s attorneys blasted the decision as unfairly targeting Lee and his company. “The decision not only goes against the public opinion and legal fairness but also damages the people’s trust in prosecutors,” Lee’s lawyers said in a statement. “It is hard to accept for defendants who believed in prosecutors’ fair decision-making process and protection of their rights.”

The prosecutors had been expected to indict Lee despite the recommendation. They have conducted a broad investigation, including hundreds of summons and dozens of office searches.

Separate from the original bribery investigation but also related to succession, prosecutors probed a controversial merger between two Samsung Group’s units in 2015 and alleged accounting fraud that may have helped Lee’s efforts to gain control. Once a new trial begins, Lee may need to attend twice a week until the court reaches a verdict.

Samsung’s shares were largely unchanged in Seoul.

Bloomberg

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