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Top aide of Samsung heir quizzed over 2015 merger of key affiliates

All News 11:49 February 14, 2020

SEOUL, Feb. 14 (Yonhap) -- One of Samsung heir Lee Jae-yong's most trusted aides was questioned by prosecutors Friday about suspicions surrounding the top conglomerate's controversial merger of two leading affiliates in 2015.

Chung Hyun-ho, president of Samsung Electronics' business support task force, was called in by the Seoul Central District Prosecutors Office in the morning to face questioning about the Samsung management's decision-making process in the merger of Samsung C&T Corp. and Cheil Industries Inc. five years ago.

The 60-year-old Chung, who had previously served in Samsung's now-disbanded control tower Future Strategy Office, reportedly cemented his relations with Lee, currently vice chairman of Samsung Electronics, while they studied together in the United States in the 1990s.

This file image from Yonhap News TV shows Chung Hyun-ho, a top aide of Samsung heir Lee Jae-yong. (Yonhap)

Prosecutors suspect Chung was deeply involved in Samsung's efforts to facilitate Lee's managerial succession from his ailing father, Lee Kun-hee, particularly during his stint at the Future Strategy Office. Six months ago, Chung was separately questioned by prosecutors investigating alleged fraudulent accounting by Samsung's biopharmaceutical unit, Samsung BioLogics.

Prosecutors think Samsung's top management may have intentionally lowered the value of Samsung C&T prior to its merger with Cheil Industries to help benefit Lee Jae-yong.

Lee was the largest shareholder in Cheil Industries, an affiliate that produces textiles, chemicals and electronic chemical materials, with a stake of 23.2 percent, which means a fall in the valuation of Samsung C&T paves the ground for a merger ratio advantageous to the Samsung heir.

In a related move, prosecutors have nearly completed their investigations into suspected window dressing by Samsung BioLogics in 2015, allegedly orchestrated by Samsung Group to overvalue Cheil's stake in the conglomerate's bio business. Through the merger, Lee was able to secure control of Samsung C&T, a de facto holding company of Samsung Group.

Prosecutors have already questioned Choi Gee-sung, former head of the Future Strategy Office, and Chang Choong-ki, former deputy chief of the office, raising speculation that Lee's summons is imminent.


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