Samsung leader acquitted in stock and accounting fraud case

A South Korean court on Monday acquitted Samsung CEO Lee Jae-yong on charges of stock price manipulation and accounting fraud, the latest twist in the billionaire's legal troubles linked to a merger that helped him take control of the company. largest company in the country.

Prosecutors had sought a five-year prison sentence and a 500 million won fine against 55-year-old Lee. He has denied any wrongdoing.

Samsung is the largest and most successful of the South Korean conglomerates known as chaebol. The group's electronics arm, Samsung Electronics, alone accounts for about a sixth of the country's exports. Mr. Lee, also known as Jay Y. Lee, is South Korea's richest person, according to Bloomberg News estimated his net worth at approximately $9 billion.

Some South Koreans speak proudly of the chaebol for helping transform the country from a war-ravaged agricultural economy into a global export power. But others are increasingly investigating whether they are suppressing smaller companies or making corrupt deals with government officials without facing sufficient repercussions.

Most chaebol scandals result from the families' attempts to ensure that the next generation inherits control, such as arranging scions to buy shares of subsidiaries at discounted prices.

Lee's legal troubles began when mass protests in Seoul in 2016 led to the ouster of former President Park Geun-hye on charges of collecting or soliciting bribes from Samsung and other chaebol and of abusing her power. Ms. Park was jailed in 2017 and pardoned and released in 2022.

Mr Lee was arrested in 2017 on charges of bribing Ms Park and her confidante, Choi Soon-sil, to win government support for a 2015 merger of two Samsung subsidiaries at the center of the corruption scandal. He was vice chairman of Samsung Electronics at the time.

Prosecutors had said the merger was a step in Lee's attempt to transfer control of Samsung from his father, Lee Kun-hee, who was incapacitated by a heart attack in 2014 and had for years been twice convicted and pardoned for bribery and tax evasion. for. A New York-based hedge fund, Elliott Management, launched a campaign urging shareholders to vote against the merger. But the country's National Pension Service, which was a major shareholder in one of the subsidiaries, voted in favor of the merger in exchange for Mr. Lee's bribes, prosecutors said.

A district court in Seoul sentenced Mr. Lee to five years in prison in 2017 for offering 8.9 billion won in bribes to Ms. Park and Ms. Choi.

His case wound its way through the legal system over the next two years, with the Seoul High Court reducing his sentence and releasing him from prison in 2018. The country's Supreme Court ordered a new trial in 2019.

While awaiting the retrial in 2020, Mr Lee was indicted on charges of stock price manipulation and accounting fraud., the case whose verdict was announced on Monday. But prosecutors were unable to arrest him because a court had refused to issue an arrest warrant.

Prosecutors had accused Mr. Lee and other current and former Samsung officials of committing these crimes during the 2015 merger. His lawyers said the merger took place in accordance with the law.

During the 2021 retrial of the bribery charges, the Seoul High Court sentenced Mr. Lee to two and a half years in prison, finding that the bribes totaled 8.6 billion won.

Later that year, the Justice Department paroled him, along with 800 other prisoners, during a holiday commemorating the end of Japanese colonial rule over Korea at the end of World War II. South Korea often paroles or pardons prisoners on major national holidays.

Business analysts were divided over whether Lee's time in prison had an impact on his empire. Samsung Electronics became the world's most profitable technology company while he was in prison. Others said Samsung postponed key decisions while Lee was in prison and fell behind competitors like TSMC.

Upon his release in 2021, he was given a five-year employment ban at Samsung. That was lifted in 2022 when he was pardoned by President Yoon Suk Yeol, who as prosecutor had led the investigation into Mr Lee.

Two months later, Samsung Electronics appointed Mr Lee as executive chairman, making him less than 15 months after his release from prison on bribery charges.