Samsung's Billionaire Boss Lee Jae-yong Acquitted In Accounting Fraud Case: Report
Earlier in 2023, South Korean prosecutors sought a five-year prison sentence for Lee and other executives.
On Monday, a Seoul court acquited Samsung Electronics Chairman Lee Jae-yong of charges related to the contentious 2015 merger of two Samsung affiliates, the media has reported. This comes as a huge respite for the billionaire boss of Samsung, after years of legal troubles. The merger was said of being orchestrated to facilitate his assumption of control over South Korea's largest conglomerate.
In the midst of the contentious 2015 merger, Lee Jae-yong was accused of engaging in stock price manipulation, breach of trust, and accounting fraud. South Korea's news agency Yonhap news agency has reported that the charges were specifically linked to the transaction where three Samsung C&T shares were exchanged for one Cheil share.
Three years and five months after being indicted on charges related to market irregularities in the merger of Cheil Industries Inc. and Samsung C&T Corp., Lee received a not-guilty verdict from the Seoul Central District Court. The merger was alleged to be a strategy for consolidating his managerial control over the group at a reduced cost, the report added.
Prosecutors suspected that the group engaged in stock market manipulation by artificially inflating Cheil's prices and suppressing Samsung C&T prices. Unfair practices, such as spreading false market information, extensive purchasing of affiliate stocks, and illicit lobbying of the National Pension Service, a significant shareholder in Samsung C&T, were alleged strategies to garner support for the merger, the report further noted.
Earlier in 2023, South Korean prosecutors sought a five-year prison sentence for Lee and other executives. They accused them of artificially inflating the stock price of Cheil Industries, a textile company, while simultaneously devaluing Samsung C&T, a construction and engineering company, in preparation for the merger, says a report by BBC.
While announcing declaring the acquittal, the court also determined that there were no illicit practices in Lee's succession process. The verdict further stated that the 2015 merger was not solely orchestrated for Lee's ascension as the group chairman or the consolidation of his control over the group. Also, there was no evidence indicating that the merger resulted in financial losses for shareholders.
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