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Samsung CEO accused of stock manipulation and accounting fraud

Samsung chief Lee Jae-yong, pictured here in 2019, faces up to five years in jail.

Samsung chief Lee Jae-yong, pictured here in 2019, faces up to five years in jail. Photo: AAP

South Korean prosecutors are seeking a five-year jail term for Samsung Electronics boss Jay Y Lee over charges of accounting fraud and stock price manipulation involving a merger of Samsung affiliates in 2015.

Lee has denied any wrongdoing. The hearing is the final lower court session before a ruling, which is expected within months, ending a trial that has lasted three years.

The case is the last against Lee, who was pardoned for an earlier, separate conviction and cemented last year his leadership position of Samsung as executive chairman.

During Friday’s hearing, prosecutors told the Seoul Central District Court that Lee, 55, and former executives had violated the Capital Markets Act to make possible the $US8 billion merger in 2015 that helped Lee assume greater control of the group’s flagship Samsung Electronics.

Stock manipulation charges

Prosecutors allege the executives’ involvement in the merger of group affiliates Samsung C&T and Cheil Industries included stock price manipulation and other wrongdoings that helped them gain at the expense of minority investors.

“The defendants undermined the foundation of the capital market to ease the leader’s succession,” the prosecution said.

“They abused the authority granted by the company and shareholders for the private interests of the group leader and abused extreme imbalance of information.”

Lee and the executives have denied wrongdoing, saying the merger and accounting processes that prosecutors have taken issue with were part of normal management activities.

The defendants’ final arguments will be heard later on Friday.

Lee attended the hearing on Friday. A small group of supporters chanted his name outside the court during a recess, while detractors yelled angrily at him.

-AAP

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