Samsung chair cleared of fraud by South Korea's apex court
What's the story
The Supreme Court of South Korea has acquitted Lee Jae-yong, the de facto head of Samsung Group, in a fraud case stemming from a 2015 merger deal. The verdict comes after a long legal battle over his alleged role in the merger. Lee was accused of stock and accounting fraud to secure his succession within Samsung Group.
Samsung's statement
'We sincerely thank the court for its wise judgment'
The Supreme Court's ruling confirmed that the merger of Samsung C&T and Cheil Industries was lawful. "We sincerely thank the court for its wise judgment following a thorough five-year trial process," said Samsung's lawyers. The case had drawn public scrutiny over corporate corruption among South Korea's powerful family-run conglomerates, or chaebols.
Fraud allegations
Accusations against Lee
Prosecutors had accused Lee and his advisors of inflating the value of Samsung Biologics, a pharmaceutical firm, through fraudulent accounting practices. They claimed this higher valuation was part of a strategy to facilitate the 2015 merger between Samsung C&T and Cheil Industries, thereby securing Lee's succession within the company.
Control shift
Alleged intention behind the merger
The prosecution also alleged that the merger was intended to transfer control of Samsung Group from Lee's father, Lee Kun-hee. The elder Lee had been embroiled in legal troubles before suffering a heart attack in 2014 and passing away in 2020. In 2017, the younger Lee was arrested for bribing an advisor to former President Park Geun-hye for a smoother succession at Samsung.
Ongoing issues
Lee has faced several legal battles
Over the years, Lee has faced separate jail terms that were cut short by a special presidential pardon while on parole from prison. This was done to help him lead South Korea's economic recovery post-COVID-19 pandemic. In 2024, a district court cleared him of all charges linked to the $8 billion merger deal. However, these legal battles have added to Samsung Group's woes amid intensifying competition in the tech industry.
Economic impact
Verdict welcomed by South Korea's business community
The Supreme Court's ruling was welcomed by South Korea's business community. The Federation of Korean Industries said the decision would enable quick decisions at Samsung's top level, helping the economy navigate trade turmoil with the US. The verdict comes at a crucial time for Lee, who has been under pressure over his leadership of Samsung Electronics amid global competition in high-tech industries like AI and semiconductors.