On Charges of Market Manipulation, Accounting Fraud
Prosecutors investigating suspicions surrounding the merger of Samsung C&T and Cheil Industries and the succession of Samsung Group’s management control requested on June 4 an arrest warrant for Samsung Electronics vice chairman Lee Jae-yong.
The Seoul Central District Prosecutors' Office filed an arrest warrant for Lee and two former Samsung Group top executives with the court earlier in the day. The two former executives were Choi Ji-sung, former head of the group’s Future Strategy Office, and Kim Jong-joong, former head of the U.S. strategy team.
Lee and the two former Samsung executives were charged with committing illegal transactions and market manipulation in violation of the Capital Markets Act and accounting fraud in violation of the Act on External Audit of Stock Companies.
The prosecution believes that the merger between Samsung C&T and Cheil Industries in 2015 and Samsung Biologics' accounting changes have all been carried out to facilitate the transfer of Samsung Group’s managerial control to Lee.
The prosecutors’ move came two days after Lee asked the Seoul Central District Prosecutors' Office to convene an investigation review committee so that external experts, not prosecutors, can determine the validity of his indictment.
The Seoul Central District Prosecutors’ Office is going to convene a citizen prosecutorial committee soon to determine whether to transfer the case to the investigation deliberation committee of the Supreme Prosecutors’ Office. Once the citizen prosecutorial committee determines that it is appropriate for an investigation deliberation committee to determine Lee’s indictment, the prosecutor general must initiate the procedure for convening it.