SEOUL, Feb. 5 – A South Korean court on Monday acquitted Samsung Electronics Chairman Lee Jae-yong of charges, such as stock price rigging and accounting fraud, linked to his management succession.
The Seoul Central District Court ruled that no evidence was shown for all charges in this case, according to multiple local media reports.
Thirteen more defendants, including former Samsung executives, were found not guilty of similar charges.
Lee was indicted in September 2020 on charges of stock price manipulation, accounting fraud and other illegalities relevant to the controversial merger in 2015 between Cheil Industries and Samsung C&T.
Prosecutors suspected that Samsung C&T, the de-facto holding company of Samsung Group, was devaluated in the stock market through irregularities, while inflating the valuation of Cheil, controlled by Lee at the time.
Three Samsung C&T shares were offered for one Cheil share to help Lee smoothly inherit the management control of the country’s biggest family-run conglomerate by allowing Lee to control the merged Samsung C&T, one of key shareholders of Samsung Electronics, prosecutors believed.
The Samsung family was known to have controlled the group with a fraction of shares through cross-shareholding.
Lee was also charged by prosecutors with his involvement in the suspected accounting fraud at Samsung BioLogics, a biopharmaceutical subsidiary of Cheil, to overvalue the subsidiary first and Cheil in the end.
The prosecution office demanded a five-year jail term and a fine of 500 million won (375,380 U.S. dollars) for Lee, but it was dismissed by the court.
The court ruled that Lee’s inheritance was not the sole purpose of the 2015 merger while no evidence was discovered that the merger caused damages to shareholders.
It noted that it cannot be concluded that the defendants had intentions of fraudulent accounting.
