Appeal Verdict in Lee Jae-Yong's Samsung BioLogics Accounting Fraud Case Set for February 3

The Seoul High Court is scheduled to announce its ruling on February 3 regarding the appeal in the accounting fraud case involving Lee Jae-Yong, the Vice Chairman of Samsung Electronics. This follows a first-instance ruling from February of last year, where Lee was acquitted of all 19 charges against him.

The court session, presided over by Judge Baek Kang-Jin, will take place at 2 PM and will involve Lee and 13 other defendants. Lee was indicted in September 2020 for allegedly manipulating stock prices to facilitate the transfer of management rights and strengthen the Samsung Group's control during the 2015 merger of Cheil Industries and Samsung C&T. He is also accused of being involved in the accounting fraud at Samsung BioLogics (삼성바이오로직스), a subsidiary of Cheil Industries.

A key issue in this trial is whether the process of converting Samsung BioLogics' subsidiary, Samsung Bioepis (삼성바이오에피스), into an affiliate constitutes accounting fraud. When it was a subsidiary, Bioepis was valued at 290 billion KRW, but its value skyrocketed to 4.8 trillion KRW upon becoming an affiliate, turning Samsung BioLogics from a loss-making entity into a profitable one. Prosecutors argue that the Samsung Group inflated the value of Samsung BioLogics to benefit Lee during the merger with Samsung C&T. Financial authorities have imposed an 8 billion KRW fine and disciplinary actions, claiming that the conversion of Bioepis to an affiliate was fraudulent.

In August of last year, the Seoul Administrative Court ruled to cancel the financial authorities' penalties but deemed the conversion of Bioepis to an affiliate as an abuse of discretion. This conclusion contrasts sharply with the first-instance ruling, which found the conversion to be legitimate and did not recognize any intent to commit accounting fraud.