Current:Home > MarketsSamsung chief Lee Jae-yong is acquitted of financial crimes related to 2015 merger -TradeGrid
Samsung chief Lee Jae-yong is acquitted of financial crimes related to 2015 merger
View
Date:2025-04-12 12:45:26
SEOUL, South Korea — A South Korean court on Monday acquitted Samsung Electronics Chairman Lee Jae-yong of financial crimes involving a contentious merger between Samsung affiliates in 2015 that tightened his grip over South Korea's biggest company.
The ruling by the Seoul Central District Court could ease the legal troubles surrounding the Samsung heir less than two years after he was pardoned of a separate conviction of bribery in a corruption scandal that helped topple a previous South Korean government.
The court said the prosecution failed to sufficiently prove the merger between Samsung C&T and Cheil Industries was unlawfully conducted with an aim to strengthen Lee's control over Samsung Electronics.
Prosecutors had sought a five-year jail term for Lee, who was accused of stock price manipulation and accounting fraud. It wasn't immediately clear whether they would appeal. Lee had denied wrongdoing in the current case, describing the 2015 merger as "normal business activity."
Lee, 55, did not answer questions from reporters as left the court. You Jin Kim, Lee's lawyer, praised the ruling, saying it confirmed that the merger was legal.
Lee, a third-generation corporate heir who was officially appointed as the chairman of Samsung Electronics in October 2022, has led the Samsung group of companies since 2014, when his late father, former chairman Lee Kun-hee, suffered a heart attack.
Lee Jae-yong served 18 months in prison after being convicted in 2017 over separate bribery charges related to the 2015 deal. He was originally sentenced for five years in prison for offering 8.6 billion won ($6.4 million) worth of bribes to then-President Park Geun-hye and her close confidante to win government support for the 2015 merger, which was key to strengthening his control over the Samsung business empire and solidifying the father-to-son leadership succession.
Park and her confidante were also convicted in the scandal and enraged South Koreans staged massive protests for months demanding an end to the shady ties between business and politics. The demonstrations eventually led to Park's ouster from office.
Lee was released on parole in 2021 and pardoned by South Korean President Yoon Suk Yeol in August 2022, in moves that extended a history of leniency toward major white-collar crime in South Korea and preferential treatment for convicted tycoons.
Some shareholders had opposed the 2015 merger, saying that it unfairly benefited the Lee family while hurting minority shareholders.
There was also public anger over how the national pension fund's stake in Samsung C&T, the merged entity, fell by an estimated hundreds of millions of dollars, after Park had pressured the National Pension Service to support the deal.
Prosecutors have argued that Lee and other Samsung officials caused damage to shareholders of Samsung C&T, which was a major construction company, by manipulating corporate assets to engineer a merger that was favorable to Cheil, an amusement park and clothing company where Lee had been the biggest shareholder.
Prosecutors also claimed that Samsung executives, through accounting fraud, inflated the value of Samsung Biologics, a Cheil subsidiary, by more than 4 trillion won ($3 billion) in an effort to make the deal look fair.
In Monday's ruling, the court said the prosecution's evidence wasn't enough to establish that the 2015 merger was conducted through illegal steps or served the sole purpose of strengthening Lee's control over Samsung Electronics, saying broader business considerations were likely involved. The court said it was unclear that the deal's conditions unfairly hurt the interests of shareholders and added that prosecutors failed to prove that Samsung officials committed accounting fraud.
South Korean corporate leaders often receive relatively lenient punishments for corruption, business irregularities and other crimes, with judges often citing concerns for the country's economy.
Lee has been navigating one of his toughest stretches as the leader of one of the world's largest makers of computer chips and smartphones, with Russia's war on Ukraine and other geopolitical turmoil hurting the world economy and deflating technology spending.
The company last week reported an annual 34% decline in operating profit for October-December quarter as sluggish demands for its TVs and other consumer electronics products offset hard-won gains from a slowly revering memory chip market.
veryGood! (7921)
Related
- New data highlights 'achievement gap' for students in the US
- Un parque infantil ayuda a controlar las inundaciones en una histórica ciudad de Nueva Jersey
- Asheville has been largely cut off after Helene wrecked roads and knocked out power and cell service
- Martha Stewart Shares the Cooking Hack Chefs Have Been Gatekeeping for Years
- The Super Bowl could end in a 'three
- Billie Jean King nets another legacy honor: the Congressional Gold Medal
- Shohei Ohtani 50-50 home run ball: Auction starts with lawsuit looming
- Angel Reese 'heartbroken' after Sky fire coach Teresa Weatherspoon after one season
- Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
- One person died, others brought to hospitals after bus crashed on interstate in Phoenix
Ranking
- Newly elected West Virginia lawmaker arrested and accused of making terroristic threats
- Johnny Depp Reprises Pirates of the Caribbean Role as Captain Jack Sparrow for This Reason
- Chappell Roan cancels 2 festival performances: 'Things have gotten overwhelming'
- A federal judge in Texas will hear arguments over Boeing’s plea deal in a 737 Max case
- Dick Vitale announces he is cancer free: 'Santa Claus came early'
- What time is Alycia Baumgardner vs. Delfine Persoon fight? Walk-in time for main event
- Justice Department sues Alabama saying state is purging voter rolls too close to election
- How Tigers turned around season to secure first postseason berth since 2014
Recommendation
Meet first time Grammy nominee Charley Crockett
Proof Kourtney Kardashian and Travis Barker's Son Rocky Is Embracing Spooky Season Before Halloween
Beware: 'card declined' message could be the sign of a scam
One person died, others brought to hospitals after bus crashed on interstate in Phoenix
Stamford Road collision sends motorcyclist flying; driver arrested
Woman loses over 700 pounds of bologna after Texas border inspection
AP PHOTOS: Hurricane Helene inundates the southeastern US
Suspect killed and 2 Georgia officers wounded in shooting during suspected gun store burglary