Samsung-Seoul clash escalates over charges against billionaire heir

Seoul

SAMSUNG Group's billionaire heir and South Korea's prosecutors are escalating an increasingly public clash over how to resolve a years-long legal dispute over bribery and succession.

Jay Y Lee, vice-chairman of Samsung Electronics, this week requested a public assessment of the validity of his indictment, invoking a 2018 statute that allows the formation of a civil panel to review cases.

In essence, he is trying to bypass professional prosecutors by appealing to a review committee, which would be made up of outside experts

Prosecutors were not amused. On Thursday, they decided to seek an arrest warrant for Lee in a related case, which if granted could return him to jail where he had spent about a year after an earlier conviction.

In the original case, Lee stands accused of using thoroughbred horses and other gifts to buy government support for plans to cement his family's control over the Samsung empire - something both Samsung and he have denied.

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The Seoul Central District Court will hear arguments on Monday before deciding whether to issue a warrant, Yonhap reported.

"Samsung got on the prosecutors' nerves. The move to request an outside review is something that's undercutting prosecutors and could enrage them," said Chung Sun-sup, CEO at corporate research firm Chaebul.com.

"The prosecutors' office has been facing a public outcry that it's abusing power. In this situation, Lee might have thought that he could get support from people who distrust prosecutors."

Lee's lawyers said the prosecutors' decision to seek an arrest warrant over alleged accounting fraud at Samsung Biologics is "strongly regrettable".

They said he has cooperated with the investigation and the warrant request seems to undermine his legitimate right to receive an objective judgment from outside authorities.

Both sides are vying for public opinion. Prosecutors have argued that Lee should face more severe penalties in the retrial because of the value of the alleged gifts, which contributed to the impeachment of President Park Geun-hye.

The 51-year-old Samsung heir convened a press conference in May to apologise for his company's missteps over succession.

Swearing his children would never run the company, he pledged to give back to society and praised his fellow citizens' dedication throughout the outbreak.

Lee could face a prison sentence of several years in the current trial. Regardless of Covid-19, the outcome could prove a watershed moment in the sensitive relationship between the country's corporate chieftains and government.

The hearings, which will likely wrap late this year, are regarded by many observers as a litmus test for whether Korea's courts are truly independent of the powerful business interests that hold sway over the economy.

In the backdrop, South Korea's largest corporation and its de facto leader have been key players in one of Asia's most successful coronavirus containment campaigns.

Since March, Samsung has dispatched its own doctors to hard-hit zones, flown Korean engineers overseas via its private jet, doled out roughly US$39 million worth of aid globally and played a central role in ramping up production of testing kits - hailed by healthcare experts as a turning point in Korea's battle against the disease.

Lee's approval ratings in independent surveys have climbed since the conglomerate, heeding the government's call, swung into action.

Samsung representatives emphasised that the company's main goal was to combat the disease, save lives and protect employees, and dismissed any suggestion they were connected to the hearing.

''Samsung Electronics is joining the global fight against Covid-19 to safeguard the health and safety of our employees, customers, partners and local communities,'' it said in a statement.\

''The smart factory programme and other global relief initiatives by Samsung Electronics have nothing to do with the ongoing legal proceedings over the case of vice-chairman Jay Y. Lee.'' BLOOMBERG