Prosecution indicts Samsung Electronics Chairman Lee Kun-hee
Prosecution indicts Samsung Electronics Chairman Lee Kun-hee
  • Lee Jun-sung
  • 승인 2019.03.22 09:34
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Lee Kun-hee, chairman of Samsung Electronics, was summarily indicted for 100 million won. He is suspected of intentionally omitting affiliates such as the Samwoo Architects & Engineers in a report.

The Seoul Central District Prosecutors' Office said on March 18 that it has requested a summary order of 100 million won in fines, the highest legal penalty, on charges of violating the fair trade law. Lee is accused of omitting data on Samsung's affiliate Samwoo and its subsidiary Seoyoung Engineering while submitting a material on the designation of the group affiliates with limited cross-investment in 2014.

Established in 1976, Samwoo has been in charge of design and supervision of Samsung Group's construction projects. This raised suspicions that Samwoo is Samsung's camouflaged affiliate. The suspicion rose to the surface in October 2016 when the Solidarity for Economic Reform reported the recording files of Samwoo insiders to the Fair Trade Commission (FTC) as evidence.

The FTC, which conducted the investigation, concluded that the companies were actually Samsung's affiliates and filed a complaint against Lee under the Fair Trade Act based on Samwoo's statement that it became the nominee of the shares following Samsung's decision, and that it also received support from Samsung for the stake purchase.

Through the investigation, prosecutors concluded that Samsung C&T effectively controlled the business, with its dominant influence over Samwoo.

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