South Korea jails 3 Samsung execs for destroying evidence in BioLogics probe
Three Samsung executives in Korea are going to jail.
The convictions came in what prosecutors had billed as “biggest crime of evidence destruction in the history of South Korea”: a case of alleged corporate intrigue that was thrown open when investigators found what was hidden beneath the floor of a Samsung BioLogics plant. Eight employees in total were found guilty of evidence tampering and the three executives were each sentenced to up to two years in prison.
The court did not rule on larger allegations of fraud that have swirled around the company. Lee Jae-yong, Samsung’s de facto leader, still faces bribery charges in a separate case.
“Destroying and hiding evidence in a group-wide move regarding the accounting fraud case that was an issue the public took interest in is not a light crime,” the court said, per Yonhap, a South Korean news agency. “The methods for concealment, which are difficult for an average person to imagine, also shocked society.”
On a warm afternoon in mid-May, South Korean investigators moved in on a Samsung BioLogics plant on the outskirts of Western Seoul. Ripping open a meeting room floor, they found a trove of laptops, USB drives and a computer server. It was not the first raid in a case that was opened last November and had its roots as far back as 2015.
That year, Korea’s financial watchdog complained that Samsung Biologics’ value had been inflated by $3.8 billion before its 2016 public listing. Samsung revealed it was being audited in May of 2018 and prosecutors picked it up the following November. Officials suspected the company of illegally changing its accounting methods in a move that inflated the value of their stake in Samsung Bioepis, a joint venture with Biogen.
Prosecutors alleged that four days after Samsung Electronics received notice of the probe in May 2018, they held an urgent meeting at the head office, where they decided to erase data, according to the Korean Biomedical Review. They told BioLogics and Bioepis to do the same, prosecutors alleged, and then requested to erase log records to delete evidence of the deletion.
After deleting the data from the main server, Samsung BioLogics took the previous servers and backup servers that still held the data and placed them beneath the floor in one of the rooms.
“Initially, the prosecution was never able to think that they would have torn the floor, and this floor could not be lifted by hand,” prosecutors said, according to KBR.
The employees later admitted to having deleted data, but said their actions were not linked to any alleged fraud. Prosecutors had sought sentences of up to 4 years.
Talk around the case has centered in part on Lee Jae-yong, the eldest child of Samsung chairman and scion Lee Kun-hee. Critics say he stood to benefit from the valuation changes in 2015, and experts told the Financial Times this week’s convictions could trigger further investigations into the embattled heir.