Samsung Electronics Executive Chairman Lee Jae-yong, also known as JY Lee, was charged by a South Korean court on Monday with stock manipulation and accounting fraud over a controversial 2015 merger of two company affiliates.
The Seoul Central District Court ruled that prosecutors failed to prove that the 2015 merger of two of Samsung’s subsidiaries, Samsung C&T and Cheil Industries, was illegal.
Prosecutors claimed that the merger harmed shareholders and was done primarily to increase Lee’s control over the company, while the chairman’s lawyers argued that no fraud was involved and that the merger was both to increase the company’s value and as part of normal business operations. . .
In a statement, Lee’s lawyers said the ruling “clearly confirms” that the merger is legal and thanked the court.
The legal victory is significant for the Samsung executive chairman __ the top boss of the entire Samsung company __ who was thought to have been restrained from taking a more active role in management because of the lawsuit. Samsung last year recorded its worst earnings performance in more than a decade due to a global recession that dampened demand for consumer electronics and computer chips.
However, the ruling is by the district court and prosecutors can still appeal the decision and take the case to the Court of Appeals, then to the Supreme Court.
Lee had already been jailed again in 2017 for corruption and later freed in 2021 in a legally separate case for a bribery scandal involving former South Korean President Park Geun-hye, who himself was jailed for helping to take bribes from big business.
Samsung executive chairman along with 13 other executives accused in stock manipulation case acquitted Among the executives was former Samsung Electronics CEO Choi Ji-sung, who today is considered one of the key figures behind Samsung’s success in smartphones and chips.
Lee became Samsung’s D Factor leader in 2014 when his father, Lee Kun-hee, suffered a heart attack and was hospitalized. After the senior Lee died in 2020, the current Samsung boss was officially named Samsung’s executive chairman in 2022. JY Lee is the grandson of Samsung founder Lee Byung-chul, who founded the company in 1938.