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Samsung heir avoids arrest over controversial merger

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Agence France-Presse

A South Korean court on Tuesday declined to issue an arrest warrant for the heir to South Korea&#x27;s Samsung empire over a controversial merger of two business units seen as a key step to his succession, Yonhap news agency reported.Lee Jae-yong, vice chairman of Samsung Electronics, is already being re-tried on charges of bribery, embezzlement and other offences in connection with a corruption scandal that brought down former South Korean president Park Geun-hye.The merger case is separate from his ongoing retrial, but adds to the difficulties for the Samsung group, by far the biggest of the family-controlled conglomerates, or chaebols, that dominate business in the world&#x27;s 12th-largest economy.Prosecutors had sought the arrest warrant for Lee on suspicion he was involved in price manipulation and illegal trading during the 2015 merger of Cheil Industries and Samsung C&amp;T.But the Seoul Central District Court turned down the prosecution&#x27;s request, ruling there was not sufficient probable cause for his arrest, Yonhap reported.Prosecutors had also asked for a warrant against two former Samsung executives over their role in the merger, but Yonhap said they also avoided arrest.&quot;There was insufficient explanation on the need to arrest the defendants against the principle of trial without detention,&quot; Judge Won Jung-sook said, according to Yonhap.&quot;The basic facts (of the case) have been all explained. And prosecutors seem to have already secured considerable amount of evidence through their investigation,&quot; she said.Lee attended the hearing, which Yonhap said lasted for about nine hours, and then awaited the court&#x27;s decision at a detention centre. He emerged at about 2:40 am Tuesday and gave a brief greeting to reporters but did not answer a question on how he felt about the decision. Lee then left in a black sedan.The merger transaction was seen as helping ensure a smooth third-generational power transfer to Lee, a scion of Samsung&#x27;s founding family.Chaebol families often have only a small ownership stake in their empires, but maintain control through complex webs of cross-shareholdings between units.<div>Apology</div>Lee was the largest shareholder in Cheil Industries, and critics say Samsung sought to artificially lower the price of C&amp;T to give him a bigger stake in the merged entity -- a key part of the Samsung structure -- consolidating his grip on the conglomerate.Last week, the Samsung group rejected media reports of price manipulation as &quot;groundless&quot;, saying in a statement Lee did not take part in &quot;any illegal acts&quot;.The prosecutors&#x27; request came weeks after Lee issued a wide-ranging apology for company misconduct and promised to end the line of family succession.Lee, 51, has effectively been at the helm of Samsung -- South Korea&#x27;s biggest business group -- since his father and Samsung group boss Lee Kun-hee suffered a heart attack in 2014.He was jailed for five years in 2017 in connection with Park&#x27;s corruption scandal, but was released a year later on appeal before the country&#x27;s top court ordered him to face a new trial.Samsung&#x27;s overall turnover is equivalent to a fifth of the national gross domestic product, making it crucial to South Korea&#x27;s economic health.The company reported a slight fall in first-quarter net profit at 4.88 trillion won ($4 billion), citing impact of the coronavirus pandemic.But Samsung -- which saw operations suspended at 11 overseas assembly lines -- has warned of further falls to come as consumer demand is &quot;significantly&quot; hit by the disease.

A South Korean court on Tuesday declined to issue an arrest warrant for the heir to South Korea's Samsung empire over a controversial merger of two business units seen as a key step to his succession, Yonhap news agency reported.

A South Korean court on Tuesday declined to issue an arrest warrant for the heir to South Korea's Samsung empire over a controversial merger of two business units seen as a key step to his succession, Yonhap news agency reported.