Samsung Chairman Jay Y. Lee’s legal troubles may be in the rearview mirror as a Korean court acquitted him on charges of stock manipulation and accounting fraud related to the 2015 merger. The Financial Times reported. The decision allows Lee to continue leading Samsung sharp decline in income last year.
Prosecutors, who had sought a five-year prison sentence, accused Lee of manipulating the share price of two Samsung subsidiaries, enabling a merger that allowed him to consolidate his power. However, the Seoul Central District Court ruled that prosecutors failed to prove this. “It’s hard to say it’s Lee Jae-yong [aka Jay Y. Lee] . . . directed the merger and the merger was made solely for the sake of Lee’s succession,” the judge said in the ruling.
The ruling will allow Li and Samsung to focus on their shrinking smartphone and memory chip businesses. Samsung recently lost the smartphone sales crown It introduced Apple and is now trailing SK Hynix in the new and hot market of high-bandwidth memory (HBM), which is used by NVIDIA and others to build artificial intelligence (AI) models.
The decision was heralded by business groups including the Korea Chamber of Commerce and Industry, but not everyone in the country agreed. “The verdict will free Lee from legal risks, but I am at a loss in terms of economic justice for the country,” said Park Ju-geun, head of corporate think tank Leaders Index. FT. “This is in stark contrast to all previous court decisions on mergers.”
Lee was originally sentenced to five years in prison after his arrest in 2017 found guilty bribery of public officials for the same association. He walked freely after a year in prison, but South Korea’s Supreme Court overturned that decision and ordered a retrial.
While being punished with Lee two and a half years in prison In early 2021, he was back in court paroled half a year later in a development that citizens’ groups described as another example of the justice system being soft on the country’s elite. (Former Korean President Park Geun-hye went to prison for her role in the same case.)
In 2022, Lee was pardoned by South Korean President Yoon Suk Yeol so that he could help the country overcome its economic crisis. Ironically, Yoon is the country’s former attorney general and oversaw Lee and Park’s original convictions.