Samsung Electronics Chairman Jay Y. Lee was acquitted by a Seoul court on Monday in a case related to irregularities in a 2015 merger of Samsung affiliates that prosecutors said was designed to cement his control of the tech group.
Background of the case
Lee, 55, was charged with stock price rigging, breach of trust and accounting fraud in the course of the controversial 2015 merger, where three Samsung C&T shares were offered for one Cheil share, as per the reports. Prosecutors had asked for a five-year jail term last November .
Lee denied wrongdoing, arguing that he and other executives acted on the belief the merger would benefit shareholders . Prior to merger, the Lee family and related entities controlled Cheil but not Samsung C&T, which was a major shareholder in Samsung Electronics – the crown jewel in the Samsung Group.
Ruling and implications
The surprise ruling could still be appealed by prosecutors . The sentence prevents a return to jail for Lee who was convicted in 2017 of bribing a friend of former President Park Geun-hye. He served 18 months of a 30-month sentence and was pardoned in 2022 by current President Yoon Suk Yeol with the government saying he was needed to help overcome a “national economic crisis” .
The acquittal is seen as a relief for Samsung, the world’s largest smartphone maker and memory chip producer, which has been facing leadership uncertainty amid Lee’s legal troubles. Lee is also expected to resume his role as the de facto leader of the conglomerate and focus on its strategic decisions .
South Korea’s biggest conglomerates are still owned and controlled by their founding families and the public has long veered between anger over their many scandals and recognition that the families are responsible for much of the country’s economic success. As of end-September, the Lee family and related entities owned 20.7% of Samsung Electronics.