A Seoul court on Monday handed jail terms of up to two years to Samsung Electronics Co. executives for destroying evidence in relation to an alleged accounting fraud at Samsung BioLogics Co.
A Samsung Electronics vice president overseeing the company's funds was sentenced to two years in prison, while two presidents in a Samsung Electronics taskforce were each sentenced to one year and six months in prison, according to the ruling handed down by the Seoul Central District Court.
Prosecutors had earlier demanded jail terms of up to four years for the indicted executives, saying, "Executives at Samsung, which is known as a leading global company, committed a massive crime that inflicted irrevocable wounds on our society. ... Despite having committed a severe crime ... they continue to make up excuses, relying on the power of the big corporation behind them," in an Oct. 28 hearing.
They had demanded a four-year prison sentence for the vice president in charge of funds and 3 1/2-year terms for vice presidents in other units.
Prosecutors and financial market regulators suspect that Samsung BioLogics, a contract drug manufacturer, inflated its valuation by approximately 4.5 trillion won ($3.78 billion) in 2015 after fraudulently changing the method used to calculate the value of its stake in Samsung Bioepis, a joint venture with U.S.-based Biogen Inc. After the accounting method changed, Samsung BioLogics swung to a profit.
Prosecutors suspect the alleged window dressing may have served to benefit a 2015 merger between two Samsung units and thereby enhance Samsung heir Lee Jae-young's control at the group.
The alleged fraud could have inflated the value of Cheil Industries Inc.'s stake in Samsung BioLogics, ahead of its merger with Samsung C&T Corp., according to civic groups. Lee was a major stakeholder in Cheil at that time. (Yonhap)