Samsung chairman Lee acquitted in controversial 2015 merger deal

05 Feb 2024 07:00pm
Samsung Electronics chairman Lee Jae-yong (2nd L) leaves after receiving his verdict on the controversial 2015 merger case, at the Seoul Central District Court in Seoul on Feb 5, 2024. A South Korean court acquitted Samsung Electronics chief Lee Jae-yong on Feb 5, of a raft of crimes linked to a controversial 2015 merger, the Yonhap news agency reported. - (Photo by Jung Yeon-je / AFP)
Samsung Electronics chairman Lee Jae-yong (2nd L) leaves after receiving his verdict on the controversial 2015 merger case, at the Seoul Central District Court in Seoul on Feb 5, 2024. A South Korean court acquitted Samsung Electronics chief Lee Jae-yong on Feb 5, of a raft of crimes linked to a controversial 2015 merger, the Yonhap news agency reported. - (Photo by Jung Yeon-je / AFP)
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SEOUL - A Seoul court acquitted Samsung Electronics Co. chairman Lee Jae Yong on Monday in connection with the controversial 2015 merger of two Samsung affiliates allegedly carried out to help him increase control of the entire Samsung empire.

The Seoul Central District Court delivered the not-guilty sentence for Lee, three years and five months after he was indicted on charges of involvement in market irregularities in the merger of Cheil Industries Inc. and Samsung C&T Corp. to solidify his managerial control of the group at a lower cost.

Lee was charged with stock price rigging, breach of trust and accounting fraud in the course of the controversial 2015 merger, where three Samsung C&T shares were offered for one Cheil share, Yonhap news agency reported.

Prosecutors suspect that the group manipulated the stock market to inflate the prices of Cheil and drive down Samsung C&T prices through various unfair practices, including disseminating false market information, mass purchasing the affiliates' stocks and illegally lobbying the National Pension Service, a major Samsung C&T shareholder, to support the merger.

Prosecutors suspect that such irregularities had been pursued since 2012 in favor of Lee, who was the biggest shareholder in Cheil with a 23.2 per cent share, and with the intent to help him tighten his control of Samsung C&T, the de facto holding company of Samsung Group.

The merger was seen as crucial to Lee's succession as the heir of the family-controlled group, as his father, Lee Kun Hee, had suffered a heart attack the previous year.

The suspected devaluation of Samsung C&T resulted in losses to other investors, prosecutors concluded.

Lee is also accused of involvement in the suspected accounting fraud at Samsung Biologics, a subsidiary of Cheil Industries.

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Prosecutors demanded a five-year prison sentence for Lee, along with a fine of 500 million won (US$373,550), pinpointing him as the ultimate person responsible for the alleged manipulation scheme.

Lee has denied the charges, claiming his personal interests were not considered during the merger of the affiliates. He has also pleaded with the court to acquit him so that he can "concentrate all resources on moving the company forward." - BERNAMA