South Korean court denies arrest warrant against Samsung heir in fraud case

A South Korean court docket on Tuesday denied an arrest warrant ask for for Samsung Group heir Jay Y. Lee just after prosecutors accused him of accounting fraud and inventory manipulation.

The ruling provided momentary relief for the vice chairman of Samsung Electronics. But he may possibly confront more strain from the scenario at a time when the world’s leading maker of smartphones and memory chips contends with the effect of the COVID-19 pandemic on demand from customers.

Shares in Samsung Group affiliate marketers rose broadly in early Tuesday trade, with Samsung Electronics rising 2%, Samsung BioLogicsup 2.4%, and Samsung C&T climbing 2.2% as opposed to a 1.2% increase in the benchmark.

Prosecutors past 7 days requested the court docket to situation an arrest warrant for the 51-calendar year-outdated Lee, as component of a probe into alleged accounting fraud involving a Samsung medicines affiliate and a 2015 merger of two other affiliate marketers.

They stated the fraudulent accounting, and alleged inventory manipulation, assisted facilitate Lee’s prepare to assume increased command of the group.

ALSO Study: Samsung heir appears in court docket, awaits decision in accounting fraud scenario

“It appears that prosecutors have secured sizeable volume of proof by way of their investigation, but they fell small of outlining the validity to detain Lee,” the Seoul Central District Court docket stated in a statement.

“Thinking about the importance of the scenario, it is ideal to determine no matter if the suspects are dependable and the degree (of their involvement) by way of adequate trials and debates,” the court docket stated.

Prosecutors referred to as the decision regrettable, saying their investigation would carry on however. They may possibly make your mind up to reapply for the arrest warrant ask for for Lee, just after more investigation, or bring Lee to demo without having arrest.

Lee’s lawyers stated in a statement they hoped the scenario would get a comprehensive evaluate from an outside the house panel that would make your mind up no matter if or not an indictment of Lee was justified.

The allegations towards Lee centre on unlawful transactions and inventory manipulation that furthered the $eight billion merger of affiliate marketers Samsung C&T Corp <028260.KS> and Cheil Industries in 2015, according to prosecutors.

The merger was viewed as key to Lee increasing command of the sprawling group but critics say it rode roughshod over the passions of minority investors.

Prosecutors also allege he had a function in inflating the value of Samsung Biologics Co Ltd <207940.KS>, which counted Cheil Industries as a main shareholder.

Samsung has denied the allegations.

Lee was beforehand jailed for about a calendar year, right up until his release in February 2018, for his function in a bribery scandal. He was accused of offering horses to the daughter of a confidante of former President Park Geun-hye to get authorities guidance for the merger of the two affiliate marketers.

South Korea’s Supreme Court docket has because overturned an appeals court docket decision to suspend Lee’s sentence in that scenario, but a court docket ruling over no matter if he must serve more jail time is however pending.

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