Samsung Chairman Lee acquitted in controversial 2015 merger case
Feb 05, 2024
Seoul [South Korea], February 5 : Samsung Electronics Co. Chairman Lee Jae-yong was on Monday acquitted by a Seoul court, in connection with a case involving the controversial 2015 merger of two Samsung affiliates, allegedly conducted to help him take over control of South Korea's biggest conglomerate, reported Yonhap News Agency.
According to the news report, the Seoul Central District Court delivered the not-guilty sentence for Lee, three years and five months after he was indicted on charges of involvement in market irregularities in the merger of Cheil Industries Inc. and Samsung C&T Corp. to solidify his managerial control of the group at a lower cost.
Lee 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.
The merger was seen as crucial to Lee's succession as the heir of the family-controlled group, as his father, Lee Kun-hee, had suffered a heart attack the previous year.
According to the Yonhap News Agency, prosecutors suspected that the group manipulated the stock market to inflate the prices of Cheil and drive down Samsung C&T prices through various unfair practices, including disseminating false market information, mass purchasing the affiliates' stocks and illegally lobbying the National Pension Service, a major Samsung C&T shareholder, to support the merger.
Prosecutors suspected that such irregularities had been pursued since 2012 in favour of Lee, who was the biggest shareholder in Cheil with a 23.2 per cent share, and with the intent to help him tighten his control of Samsung C&T, the de facto holding company of Samsung Group.
Announcing the acquittal omn Monday, the court found no illegalities in Lee's succession process, the news report said.
The court concluded that Lee's succession as the group chairman or the solidification of his control of the group was not the sole purpose of the 2015 merger, nor was there any evidence showing that the merger inflicted financial losses on shareholders.
The court also found Lee not guilty of charges of involvement in the suspected accounting fraud at Samsung Biologics, a subsidiary of Cheil Industries.
"None of the criminal charges in this case have been proven," the court said, as per the news report.
