Samsung: Court rejects Lee Jae-yong arrest warrant request

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A court in Seoul has denied an arrest warrant request for Samsung heir Lee Jae-yong, after prosecutors accused him of accounting fraud and stock manipulation.

The ruling provides at least temporary relief for the de facto head of the South Korean conglomerate.

But Mr Lee isn’t completely in the clear yet as prosecutors said they will continue with their investigation.

They can still return with new evidence and seek another arrest warrant.

Last week state prosecutors asked the court to issue an arrest warrant against Mr Lee related to their probe into accounting fraud and the controversial merger of two Samsung businesses, Samsung C&T and Cheil Industries, in 2015.

Prosecutors said the deal helped his plan to take greater control of the group.

On Friday Samsung denied the allegation of stock-manipulation against Mr Lee, saying it was «beyond common sense» to claim he was involved in the decision-making.

In another statement over the weekend, the group said the lengthy probe is weighing on management, which is in «crisis» at a time when the coronavirus pandemic and US-China trade war are adding to uncertainty.

Three top executives, including a vice president, have already been given prison sentences for hiding or destroying evidence in the probe.

Who is Lee Jae-yong?

The 51-year-old, also known as Jay Y Lee, is the son of Lee Kun-hee, chairman of Samsung Group, South Korea’s largest conglomerate. He is also the grandson of Samsung founder Lee Byung-chul.

With a degree from South Korea’s top university and an MBA from one of Japan’s most prestigious universities, he has been groomed to take over the family firm.

He became a Samsung president in 2009 and in 2013 was made vice-chairman of Samsung Electronics, the division which makes devices including smartphones, televisions, cameras and hard drives.

Since Mr Lee’s father suffered a heart attack in 2014, he has been considered the de facto boss of the entire Samsung group of businesses.

According to Forbes magazine, the divorced father-of-two has a net worth of around $6.6bn (£5.2bn).

What is the case about?

In February 2017, Lee Jae-yong was arrested and then charged over his alleged role in a political and corporate scandal linked to South Korea’s then president, Park Geun-hye.

Charges against Mr Lee included bribery, embezzlement, hiding assets overseas and perjury.

Samsung was accused of paying 43bn won ($35.7m; £28.1m) to two non-profit foundations operated by Choi Soon-sil, a friend of Ms Park, in exchange for political support.

More specifically, the favours were alleged to include backing for a controversial Samsung merger which paved the way for Mr Lee to become the head of the conglomerate, a deal that needed support from South Korea’s government-run national pension fund.

Mr Lee denied the charges. He admitted making donations but said Samsung did not want anything in return.

In August 2017 a court convicted him of the charges and sent him to prison for five years.

Six months later that sentence was halved, and the Seoul High Court decided to suspend the jail term, meaning he was free to go.