South Korea prosecutors seek 5-year jail term for Samsung Electronics chief in appeals case

SEOUL – South Korean prosecutors requested on Nov 25 a five-year jail term for Samsung Electronics chairman Lee Jae-yong over his actions during a controversial merger of affiliates that helped solidify his control, in a case being tried at an appeals court.

Lee was found not guilty in February of accounting fraud and stock manipulation by a Seoul Central District Court, but the prosecutors appealed the ruling.

The appeal hearings come at a time when Lee faces growing questions about his ability to lead Samsung, the world’s top memory chip and smartphone maker, as it grapples with slowing profits and falling stock prices.

Lee and other former executives were accused of engineering a merger between two Samsung affiliates – Samsung C&T and Cheil Industries – in a way that dealt poorly with the interests of minority shareholders.

In the closing arguments, state prosecutors said Lee acted in the merger to benefit his personal standing as the de-facto leader of the Samsung conglomerate at the expense of shareholders and investors.

Lee, a third-generation leader of the Samsung Group, has been dogged over the past decade by lawsuits, jail time and attacks from foreign hedge fund Elliott over the 2015 merger of the affiliates that helped tighten his grip on the sprawling conglomerate, after his father was hospitalised due to heart attack in 2014. REUTERS