A Seoul appeals court on Monday upheld the acquittal of Samsung Electronics Executive Chairman Jay Y. Lee in accounting fraud and stock manipulation in a case related to a controversial 2015 merger of two Samsung affiliates, Cheil Industries and Samsung C&T.
The Seoul High Court dismissed the prosecution’s appeal in the case involving Lee, who faced 19 charges related to unfair trading and stock price manipulation under the Financial Investment Services and Capital Markets Act associated with the controversial 2015 merger of the two affiliates. Prosecutors had alleged that the merger was intended to strengthen his control over South Korea’s biggest electronics giant. Also, they said Samsung’s merger process took a toll on the shareholders of Samsung C&T.
The ruling comes one year after a South Korean lower court acquitted Lee of wrongdoing and nearly four years and five months after Lee was indicted in Septemger 2020.
In September 2020, Lee, then the vice chair of Samsung Electronics, along with other former Samsung executives, were indicted for advocating the merging of Cheil Industries, Samsung’s textile affiliate, with Samsung C&T, its construction unit, to take over the tech giant’s management controls in 2015.
All of the former Samsung execs were also found not guilty of the accusations by a Seoul appeals court on Monday.
During the November 2023 hearing, Lee denied the allegations of misconduct and stated that the merger process followed the company’s standard operational procedures. In November last year, prosecutors in South Korea requested a five-year prison term and a 500 million KRW fine, approximately $375,000, for Samsung Electronics leader Jay Y. Lee at an appeals court.
The decision caps off nearly a decade of legal disputes for Lee, starting with one in 2015 focusing on a merger that highlighted issues with corporate governance.
“It is difficult to say the merger was carried out without the two companies’ consent, as it was decided under arrangement and cooperation of Samsung C&T, Cheil Industries and Samsung’s Future Strategy Office,” the court said, refuting the prosecution’s claim that Samsung’s control tower office made the merger decision solely.
The prosecutors said that they will review the high court’s decision before deciding whether to appeal the ruling to the Supreme Court, according to a media outlet by Yonhap.
