Samsung Group heir, Jay Y. Lee got himself questioned today, Tuesday (May 26th) by prosecutors about a controversial 2025 merger and alleged accounting fraud that they said may have helped him advance his succession-planning agenda at the country’s biggest conglomerate.
The questioning brings fresh legal issues for Lee who is already facing court trial over a charge of bribery aimed at winning support to succeed the ailing group patriarch, Lee Kun-hee and which involved former South Korean President Park Geun-hye.
The prosecutors have already been investigating suspected accounting fraud at the company’s drug division, Samsung Biologics right after Korean financial watchdog made a complaint that the firm’s value had been inflated by US$3.64 Billion (KR₩ 4.5 Trillion) back in the year 2015.
The allegation also includes the fact that Samsung Biologics had violated accounting rules in order to help improve the value of its major owner Cheil Industries which counted Lee as its top shareholder.
Cheil, Samsung Group’s fashion and theme-park operator, merged with the group holding company Samsung C&T back in 2015 in a transaction that enabled Lee to become the top shareholder of Samsung C&T. The deal was followed by criticism by US hedge fund Elliott Management and other investors for favoring family members at the expense of minority shareholders.
The prosecutors’ office confirmed Lee was summoned for questioning. “We today summoned a relevant person with regard to Samsung Group’s illegal merger and accounting fraud case,” an official at the Seoul Central District Prosecutors’ office told Reuters. While a spokesperson at Samsung Electronics, which is the conglomerate’s biggest company where Lee is also the Vice chairman had declined to make any comment.
Lee who is 51 years old had initially served a one-year detention over the 2015 bribery case which was suspended in 2018 but could get a tougher sentence after the Supreme Court overturned a lower court ruling on the case last year.
As at the beginning of this month, Lee apologized for the bribery scandal and pledged that he would not pass on the company which was founded by his grandfather to his own children but then got criticized by governance expert for lacking details.
“There are still a lot of controversies related to his management succession. He will not be able to avoid public criticism,” said Park Ju-gun, head of research firm CEO Score.