Monday 9 December 2019 12:56 pm

Samsung executives jailed over destruction of evidence in fraud case

Eight employees of Samsung affiliates have been found guilty of destroying evidence by a South Korean court, in a case linked to allegations of a $3.9bn accounting fraud suspected to be part of a plot to cement the control of the company’s founding family.

Three Samsung Electronics executives were handed jail sentences of up to two years by a court in Seoul, according to the state news agency, for their role in a plot that included burying computers under factory floors at its biotech affiliate.

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The case also involved employees from two other affiliates of the South Korean conglomerate: drugmaker Samsung Biologics and subsidiary Samsung Bioepis.

The trial is the latest legal trouble for the country’s largest conglomerate, whose leader Lee Jae-yong is facing charges in a corruption scandal involving former president Park Geun-hye.

Prosecutors accused the executives of ordering employees of Samsung Biologics to destroy and conceal internal documents as authorities investigated alleged accounting violations at the company. 

Prosecutors discovered almost two dozen computers and notebooks as well as computer servers under the floors of Samsung Biologics factories on the outskirts of Seoul during a raid in May.

During a hearing in October, prosecutors had alleged the Samsung employees took part in the “biggest crime of evidence destruction in the history of South Korea”, and had sought jail sentences of up to four years.

Handing down the sentences, Judge Soh Byung-seok said: “The boldness of the defendants’ criminal acts was beyond the public’s imagination and stunned society.”

“Most South Korean people want Samsung… to become the world’s top-class company contributing to the country’s economy,” the judge added.

“However, if such growth is based on breaches and unlawfulness, it will not be applauded.”

Samsung Biologics and lawyers for the executives were not available for comment when contacted by Reuters, and Samsung declined to comment.

Prosecutors began investigating the suspected fraud at Samsung Biologics after the South Korean financial watchdog alleged that the firm’s value had been inflated by 4.5 trillion won (£3bn) in 2015. 

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Critics suggested the impact of this was to boost vice chairman Lee Jae-yong’s control over the company. Lee Jae-yong is the son of ailing Samsung chairman Lee Kun-hee, and the de-facto heir to the company. 

Lee Jae-yong is facing charges of having bribed former president Park in return for support in Samsung’s succession planning.

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