Samsung Chairman Jay Y. Lee's legal troubles may be in the rearview mirror as a Korean court acquitted him of charges of stock manipulation and accounting fraud in connection with a 2015 merger, The Financial Times reported. The decision allows Lee to continue leading Samsung, which has experienced a sharp drop in income Last year.
Seeking a five-year prison sentence, prosecutors accuse Lee of manipulating the stock prices of two Samsung subsidiaries to facilitate a merger that would allow him to consolidate his power. However, the Seoul Central District Court ruled that prosecutors failed to prove it. “It is difficult to say that Lee Jae-yong (aka Jay Y. Lee)… spearheaded the merger, and that the merger was carried out solely for the sake of Lee's estate,” he said. the judge said in the decision.
The verdict will allow Lee and Samsung to focus on their declining businesses in smartphones and memory chips. Samsung recently lost its smartphone sales crown to Apple, and is now behind SK Hynix in the hot new market for high-bandwidth memory (HBM) used by NVIDIA and others to create artificial intelligence (AI) models.
The decision was welcomed by business groups including the Korean Chamber of Commerce and Industry, but not everyone in the country agreed. “The ruling will free Lee from legal risks, but I am at a loss for words in terms of the country's economic justice,” said Park Ju-geun, director of business think tank Leaders Index. FT. “This goes completely against all previous court rulings regarding the merger.”
Lee was initially sentenced to five years in prison in 2017 after being guilty corruption of public officials in the context of the same merger. He walked freely after a year of detention, but the South Korean Supreme Court overturned this decision and ordered the case to be retried.
While Lee was sentenced to two and a half years in prison at the beginning of 2021, during this new trial, it was released on parole six months later, in a development that civic groups had described as another example of the justice system's leniency toward the country's elite. (Former Korean President Park Geun-hye was also imprisoned for her role in the same affair.)
In 2022, Lee was pardoned by South Korean President Yoon Suk Yeol, apparently to help the country overcome its economic crisis. Ironically, Yoon is the country's former chief prosecutor and oversaw the original convictions of Lee and Park.