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Samsung chief acquitted of financial crimes over 2015 merger

February 5, 2024

A Seoul court ruled that there was insufficient evidence to prove that the merger between two Samsung affiliates in 2015 was unlawfully conducted to strengthen Chairman Lee Jae-yong's control over the tech conglomerate.

Lee Jae-yong looks subdued as he leaves the courtroom
Samsung Electronics Chairman Lee Jae-yong was previously convicted over separate bribery charges related to the 2015 deal and served 18 months in prisonImage: Chung Sung-Jun/Getty Images

A South Korean court on Monday cleared Samsung Electronics Chairman Lee Jae-yong of financial misconduct charges related to a 2015 merger that prosecutors said was aimed at consolidating his power within the conglomerate.

The verdict potentially eases Lee's legal troubles following the Samsung heir's pardon for a separate conviction of bribing a former president that toppled the government of Park Geun-hye.

What the court said about Lee Jae-yong's conviction

The Seoul Central District Court found insufficient evidence to support the claims that the merger between two Samsung affiliates — Samsung C&T and Cheil Industries — was unlawfully intended to bolster Lee's grip over Samsung Electronics.

The court said it did "not recognize intention to harm shareholders" through the merger.

"Solidifying Lee's control and ensuring his succession wasn't the only purpose of the merger," the court ruled.

Lee denied wrongdoing, arguing the merger was part of "normal business activity" that was intended to benefit shareholders.

"I swear I had never imagined increasing my stake at the expense of causing damage to other shareholders," he said in his closing argument, according to South Korea's Yonhap news agency.

The prosecution, which had proposed a five-year prison sentence for Lee on charges including stock price manipulation and accounting fraud, has not disclosed plans for an appeal.

Samsung boss in prison

In 2017, Lee was convicted over separate bribery charges related to the 2015 deal and served 18 months in prison.

He was initially sentenced to five years for bribing former President Park Geun-hye to win government support for the merger, seen as crucial for his control over Samsung.

He was pardoned in 2022 by current President Yoon Suk Yeol with the government seeking his help to overcome a "national economic crisis."

ss/kb (AP, AFP, Reuters)