By Thaler
Samsung chief Lee Jae-yong avoided another jail stint Monday after he was acquitted of financial crimes related to the controversial merger of two of the company’s affiliates.
Seoul Central District Court ruled in favor of Lee, saying the prosecution failed to sufficiently prove the merger of Samsung C&T and Cheil Industries in 2015 was illegally completed to strengthen Lee’s position at Samsung at the expense of shareholders, according to CNN Business.
Lee was facing charges of stock price manipulation and accounting fraud, though his attorneys had denied any wrongdoing, saying the merger helped the company’s management become more stable.
“Even if Lee’s control has been strengthened, the merger in this case cannot be considered unfair, as long as there is a reasonable purpose for the merger,” chief judge Park Jung-jae said after his shock ruling, per CNN.
It’s unclear if prosecutors will appeal the ruling.
South Korean prosecutors had originally been seeking a five-year prison term for 55-year-old Lee, also known as Jay Y. Lee, who has been able to assume Samsung’s chief role despite being a two-time convicted felon.
In 2017, Lee was found guilty of bribing former South Korean president Park Geun-hye and her confidant with roughly $6.4 million to secure the government’s support for the 2015 C&T-Cheil merger.
Lee was sentenced to five years in prison at the time, but was set free after just 11 months when an appeals court suspended his sentence.
The scandal sparked massive protests in South Korea and led to the ouster of Park, who was sentenced to 20 years in prison for her role in the bribery.
Meanwhile, Lee vowed to improve compliance at Samsung and pledged to “create a transparent company.”
By January 2021, Lee was found guilty again of embezzlement and bribery by the Seoul High Court, which handed down a 2.5-year prison term.
However, the billionaire was released on parole by August 2021 and pardoned a year later, according to CNN. Shortly thereafter, he was officially elevated to lead Samsung.
Lee, a third-generation corporate heir to Samsung, began working at the conglomerate in the early 1990s. He was Samsung’s de-facto ruler by 2014, after his father, Lee Kun-hee, suffered a heart attack and assumed the role of executive chairman in October 2022, two years after he passed away.
Lee’s father had also been twice convicted of bribery and other corruption charges, though he never spent a night in jail.
Representatives for Lee at Samsung did not immediately respond to request for comment.
The Seoul Central District Court’s latest ruling come at a time when Samsung is losing market share to Apple.
The iPhone maker topped Samsung in 2023 smartphone shipments, prompting the Lee-run firm to roll out a line of premium smartphones with multiple artificial intelligence functions, including simultaneous translation of foreign language phone calls.
In another effort to dethrone Apple, Samsung kept the prices of the Galaxy S24 base and Plus models at the same level as they were last year – staring at $799 and $999, respectively – though the price of the Ultra has been increased by $100.
Samsung also recently posted its fourth straight quarter of profit decline, reporting revenues roughly $1 billion below expectations.
