Samsung Chief cleared of merger case charges

A Seoul court has acquitted Samsung Electronics Chairman Jay Y. Lee of charges related to accounting fraud and stock manipulation.

The case revolved around the 2015 merger of Samsung affiliates, which prosecutors alleged was orchestrated to solidify his control over the technology group.

In November last year, prosecutors sought a five-year prison sentence. Lee maintained his innocence, contending that he and fellow executives made decisions based on the belief that the merger would be advantageous for shareholders.

In the merger trial, prosecutors alleged that Lee, aged 55, and other former executives violated the Capital Markets Act, orchestrating a merger between Samsung C&T and Cheil Industries that disregarded the interests of minority shareholders.

Before the merger, the Lee family and associated entities held control over Cheil, while Samsung C&T, a significant shareholder in Samsung Electronics, the flagship of the Samsung Group, was not under their control.

The surprise ruling could still be appealed by prosecutors.

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This verdict spares Lee from a return to jail. Previously convicted in 2017 for bribing a friend of former President Park Geun-hye, he served 18 months of a 30-month sentence. In 2022, President Yoon Suk Yeol pardoned him, citing the necessity of Lee’s involvement in addressing a “national economic crisis.”

The largest conglomerates in South Korea are still owned and overseen by their founding families. Public sentiment oscillates between frustration over numerous scandals and acknowledgment that these families play a pivotal role in the nation’s economic achievements.

As of the end of September last year, the Lee family and affiliated entities held a 20.7% ownership stake in Samsung Electronics.