Court rejects prosecutors’ request for arrest warrant against Lee Jae-yong

Posted on : 2020-06-09 16:09 KST Modified on : 2020-06-09 16:10 KST
Seoul Central District Court judge says there’s no need to detain defendant during trial
Samsung Vice Chairman Lee Jae-yong heads to trial at the Seoul Central District Court on June 8. (photo pool)
Samsung Vice Chairman Lee Jae-yong heads to trial at the Seoul Central District Court on June 8. (photo pool)

A South Korean court has rejected a request for an arrest warrant against Samsung Electronics Vice Chairman Lee Jae-yong. This represents a watershed moment in the one-year and seven-month investigation against Lee, whom the prosecutors regard as the main beneficiary of the illegal succession of management rights over the Samsung Group, as well as the person who gave the orders in question.

Hon. Won Jeong-suk, the judge responsible for warrants at the Seoul Central District Court, decided not to issue a warrant at 2 am on June 9. “The basic facts of the case have been established, and the prosecutors have already accumulated a considerable amount of evidence in the investigation thus far. But their argument about the ‘necessity and significance’ of taking the defendants into custody is not adequate to overcome the principle of not detaining defendants during the trial,” the judge said.

“In light of the importance of this incident, I think it is appropriate for the question of whether the defendants are guilty and, if so, the extent of their guilt to be decided through arguments in the trial,” Won added. She applied the same rationale in rejecting detention warrants for Choi Gee-sung, former director of Samsung’s defunct Future Strategy Office (FSO), and Kim Jong-jung, former head of the FSO’s strategy team.

Lee, Choi, and Kim are charged with conducting illegal transactions and manipulating security prices under the Financial Investment Services and Capital Markets Act and violating the Act on External Audit of Stock Companies. The prosecutors believe that Samsung arranged a merger between Samsung C&T and Cheil Industries that served the interests of Lee, manipulated security prices in order to pull off the merger, and then, after the merger was complete, committed 4.5 trillion won (US$3.76 billion) worth of accounting fraud at Samsung BioLogics.

During the pre-detention hearing the previous day (that is, the review of the warrant request), the prosecution and defense vigorously made their respective cases. Lee’s legal team argued that management rights of the group were passed down to Lee as a “side effect of the reorganization of the business structure carried out in response to ‘economic democratization’ legislation by the Park Geun-hye administration.”

Meanwhile, the prosecutors emphasized that “Lee Jae-yong provided false information to the market that distorted the decision-making of stockholders and investors in order to gain trillions of won worth of managing rights as part of his efforts to take over control over the group.” Their arguments were backed up by a 150-page warrant request as well as 200,000 pages of investigation records. The prosecutors’ key evidence includes “Essential Briefing for Vice Chairman Lee [Jae-yong]” and “Project G,” two documents composed by Samsung while it was preparing for the succession of management rights, a years-long project that began in 2012.

But the court’s refusal to issue an arrest warrant against Lee will almost certainly disrupt the prosecutors’ investigation. Following the ruling, the prosecutors said that they “accept the court’s disappointing decision” and promised their full commitment to the investigation in accordance with laws and principles regardless of the outcome of the warrant hearing.

By Lim Jae-woo, staff reporter

Please direct comments or questions to [english@hani.co.kr]

button that move to original korean article (클릭시 원문으로 이동하는 버튼)

Related stories