Asia Markets

South Korean prosecutors indict Samsung heir on stock manipulation charge

Key Points
  • Prosecutors decided to indict 52-year-old Lee due to the gravity of manipulating the capital market over a controversial 2015 merger of two Samsung affiliates that helped him assume greater control of the group's crown jewel Samsung Electronics.
  • It comes despite an independent panel's recommendation in June not to indict him, a prosecution official said on Tuesday.
Jay Y. Lee, co-vice chairman of Samsung Electronics, center, wears a protective mask as he is surrounded by members of the media while arriving at the Seoul Central District Court in Seoul, South Korea, on Monday, June 8, 2020.
SeongJoon Cho | Bloomberg via Getty Images

South Korean prosecutors indicted Samsung Group leader Jay Y. Lee on charges including manipulating stock prices and breach of trust in order to cement control of the group, a prosecution official said on Tuesday.

Prosecutors decided to indict 52-year-old Lee due to the gravity of manipulating the capital market over a controversial 2015 merger of two Samsung affiliates that helped him assume greater control of the group's crown jewel Samsung Electronics, despite an independent panel's recommendation in June not to indict him, the official said.

Charges against Lee included practice of unfair transaction and manipulation of market prices under the Capital Markets Act, breach of trust during the course of business, and false disclosure and accounting fraud under the External Audit Act, prosecutors said in a statement.

Lee's lawyers did not have an immediate comment.

The indictment paves the way for Lee to undergo trial on the charges. He will not be detained as a Seoul court denied in June a request from prosecutors for an arrest warrant. But the court had said prosecutors seemed to have secured considerable amount of evidence and it is appropriate to send the case to trial.

Lee is separately accused of giving horses to the daughter of a confidante of former president Park Geun-hye to win government support for the merger of the two affiliates.

Shares of major Samsung firms were largely unchanged following the announcement. Samsung Electronics was up 0.6% and Samsung C&T had risen 3.2% versus the broader market's 1.1% rise.