SEOUL, South Korea – The Seoul Central District Court acquitted Samsung Electronics Chairman Lee Jae-yong of financial crimes on Monday, concerning a controversial merger between Samsung affiliates in 2015 that tightened his grip over South Korea’s largest company.
The court ruling could potentially alleviate the legal troubles surrounding the Samsung heir, less than two years after he was pardoned for a separate conviction of bribery in a corruption scandal that contributed to the downfall of a previous South Korean government.
Critics, including activists, progressive politicians, and commentators, questioned the court’s decision, particularly as Lee had previously been convicted in a separate case of bribing a former president for government support for the 2015 merger. This ruling was seen as a setback for efforts to reform the management culture of South Korea’s family-owned conglomerates and their close ties with the government.
Prosecutors had sought a five-year jail term for Lee, accusing him of stock price manipulation and accounting fraud. Lee, however, maintained his innocence, describing the 2015 merger as “normal business activity.”
Lee, a third-generation corporate heir, officially took the reins as chairman of Samsung Electronics in October 2022, after leading the Samsung business group since 2014, following his father’s incapacitation due to a heart attack.
He had previously served 18 months in prison after being convicted in 2017 over separate bribery charges related to the 2015 deal. The scandal ultimately led to massive protests and the ouster of the former president.
Additionally, there was public outrage over how the national pension fund’s stake in Samsung C&T, the merged entity, plummeted due to pressure from the then-president to support the deal.
The court’s ruling stated that the prosecution’s evidence wasn’t sufficient to establish that the 2015 merger was conducted through illegal means or solely aimed at strengthening Lee’s control over Samsung Electronics, suggesting broader business considerations were at play.
The ruling received mixed reactions, with some calling it a collapse in economic and judicial justice, while others praised it as a positive for Samsung’s stability and competitiveness in the global market.
Amidst these legal battles, Samsung continues to face challenges in the global market, with geopolitical turmoil and a decline in technology spending affecting its operations. The company recently reported a significant decrease in operating profit, reflecting the impact of sluggish demand for its products.