A South Korean court on Monday found Samsung Electronics chief Lee Jae-yong not guilty of financial crimes related to a controversial merger in 2015, his lawyers said.
The billionaire was charged with stock manipulation and accounting fraud tied to the merger of two Samsung affiliates. According to AFP, the court noted insufficient evidence to show an intention to harm shareholders through the merger.
South Korean prosecutors had previously argued that the merger between Samsung C&T, a construction and engineering firm, and textile company Cheil Industries was primarily done for Lee to gain a tighter grip on Samsung Electronics, the group's flagship company.
SEOUL, SOUTH KOREA - FEBRUARY 05: Samsung Electronics Co. Executive Chairman Lee Jae-yong leaves after attending a final decision at the Seoul Central District Court on February 05, 2024 in Seoul, South Korea.
Samsung Electronics Chief Lee Jae-yong Acquitted of Crimes Linked to the 2015 Merger
Addressing concerns about the merger's legitimacy, the court emphasized that the consolidation of Lee's authority and succession planning were not the sole objectives behind the merger, underscoring the absence of concrete evidence to substantiate the prosecution's allegations.
The verdict absolves Lee of multiple charges, including stock price manipulation, breach of trust, and financial misconduct, stemming from the merger between Samsung C&T and Cheil Industries in 2015.
Lee's legal team expressed gratitude for the court's ruling, asserting the merger's legitimacy and thanking the judiciary for its discerning judgment.The merger had faced scrutiny over allegations of undervaluing Samsung C&T's stock price, disadvantaging its shareholders.
Prosecutors contended that the exchange ratio in the merger, offering three Samsung C&T shares for one Cheil share, undermined market principles and facilitated a succession strategy benefiting Lee.
Driven by Personal Interests?
During the trial, the prosecution argued that the merger was driven by personal interests, contributing to a broader corporate governance and market integrity issue in South Korea.
In his defense, Lee refuted claims of self-interest, asserting that the merger was not orchestrated to bolster his personal stake at the expense of other shareholders. He maintained his innocence throughout the trial, stating that he never intended to harm other investors.
Critics have expressed dismay over the court's decision, with some suggesting that Lee had been granted undue leniency. They questioned the adequacy of the prosecution's efforts in holding Lee accountable, raising concerns about the fairness of the legal process.
The verdict, delivered nearly three years after the case's initiation, follows a series of hearings spanning over 100 sessions. Its implications will likely reverberate across Samsung Electronics, providing clarity for the company's future strategic direction.
Lee's acquittal is anticipated to boost Samsung Electronics, a pivotal player in the global memory chip market, and allow the conglomerate to focus on long-term investment strategies and business expansion.
AFP reported that Lee's legal saga has been closely watched, marked by a prior conviction for fraud and embezzlement, which led to an 18-month prison sentence.
Following his release on parole in 2021, Lee resumed his corporate responsibilities and was formally appointed as executive chairman of Samsung Electronics in 2022, following a presidential pardon for his earlier convictions.
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