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Prosecutors on Tuesday summoned a former CEO of Samsung C&T, as part of its ongoing investigation into the firm’s alleged accounting fraud during its 2015 merger with its sister company Cheil Industries.
The Seoul Central District Prosecutors’ Office initially planned to question Kim Shin, who headed Samsung C&T from 2010 and 2018, on details of the controversial merger but sent him back due to an attorney issue.
The prosecution suspects that Samsung C&T deliberately lowered its corporate value by reducing its earnings in order to lead to a favorable merger rate for Samsung Electronics Vice Chairman Lee Jae-yong, the eldest son of Samsung Group Chairman Lee Kun-hee.
The prosecution is likely to summon Kim again when he appoints a new lawyer as it concluded that the person who accompanied him Tuesday was inappropriate as he currently acts as the legal representative of Samsung C&T.
Prosecutors suspect that Samsung C&T intentionally didn’t disclose its information to shareholders such as the fact that it clinched a 2 trillion won ($1.7 billion) worth power plant deal in Qatar to drop its valuation in order to help the transition of management control at Samsung Group from the bedridden father Lee Kun-hee to son Jae-yong.
The investigation was launched when the Financial Services Commission filed a complaint with the prosecution against Samsung BioLogics, the group’s drug manufacturing unit, for violating accounting rules in late 2018.
By Park Han-na (hnpark@heraldcorp.com)
The Seoul Central District Prosecutors’ Office initially planned to question Kim Shin, who headed Samsung C&T from 2010 and 2018, on details of the controversial merger but sent him back due to an attorney issue.
The prosecution suspects that Samsung C&T deliberately lowered its corporate value by reducing its earnings in order to lead to a favorable merger rate for Samsung Electronics Vice Chairman Lee Jae-yong, the eldest son of Samsung Group Chairman Lee Kun-hee.
The prosecution is likely to summon Kim again when he appoints a new lawyer as it concluded that the person who accompanied him Tuesday was inappropriate as he currently acts as the legal representative of Samsung C&T.
Prosecutors suspect that Samsung C&T intentionally didn’t disclose its information to shareholders such as the fact that it clinched a 2 trillion won ($1.7 billion) worth power plant deal in Qatar to drop its valuation in order to help the transition of management control at Samsung Group from the bedridden father Lee Kun-hee to son Jae-yong.
The investigation was launched when the Financial Services Commission filed a complaint with the prosecution against Samsung BioLogics, the group’s drug manufacturing unit, for violating accounting rules in late 2018.
By Park Han-na (hnpark@heraldcorp.com)
