South Korean prosecutors sought a five-year prison sentence and a fine of 500 million KRW ($375,000) for Samsung Electronics Chief Jay Y. Lee.
This case was filed at an appeals court on Monday as first reported by Reuters.
Lee was declared not guilty of accounting fraud and stock manipulation in February by Seoul Central District Court, but prosecutors appealed the decision, according to News. Az, citing foreign media.
The issue, involving the merger of Samsung C&T and Cheil Industries, has prompted concerns about Lee’s leadership and Samsung’s future as it navigates a difficult economic landscape.
Prosecutors claim that the 2015 merger was designed to increase Lee’s control of the Samsung group at the cost of smaller shareholders.
In the same lawsuit, they were accused of inflating Cheil and Samsung C&T stock prices, as well as false accounting at Samsung Biologics, in which Cheil had a large investment.
The prosecution said that Samsung had a merger strategy that helped Lee consolidate power and gain management privileges.
Although a lower court acquitted Lee of accounting fraud and stock manipulation in February, prosecutors filed an appeal, demanding a heavier sentence.
A ruling on the appeals case is due between January and February 2025, according to a local news site.
Monday’s hearing occurs during a difficult era for Samsung’s weak profit growth. In the third quarter, the world’s largest memory chip manufacturer earned $7.67 billion in operating profit.
This represents an increase from $1.73 billion a year ago, but no change from the $7.45 billion reported in the preceding quarter.
The appeal proceedings ended on Monday, November 25, with prosecutors sustaining Lee’s five-year sentence. Defence attorneys argued for the earlier acquittal, citing a lack of proof of purposeful wrongdoing.
We earlier reported that social media company Meta was fined 21.6 billion won ($15.7 million) by South Korea’s privacy watchdog for unlawfully gathering private information from Facebook users.
