A South Korean appeals court has acquitted Samsung Chairman Lee Jae-yong in a 2015 merger of two of the group's subsidiaries.
According to Yonhap news agency, the Seoul High Court (South Korea) on February 3 upheld the verdict of the first instance court, stating that Samsung Chairman Lee Jae-yong did not commit a crime in the merger of Cheil Industries and Samsung C&T in 2015.
Samsung Chairman Lee Jae-yong leaves court in Seoul on February 3.
Prosecutors had previously suspected the merger was designed to help Mr. Lee gain control of Samsung at a lower price. In 2020, Mr. Lee was indicted on charges of stock price manipulation, audit fraud and other violations.
Before the merger in 2015, both companies operated independently but were subsidiaries of Samsung. According to The Korea Herald , Samsung C&T is a construction and engineering company while Cheil Industries is a textile company. Under the deal, three shares of Samsung C&T were sold for one share of Cheil Industries.
Mr. Lee was then vice chairman of Samsung Group and Cheil's largest shareholder with a 23.2% stake, but did not directly own any shares of Samsung C&T. Prosecutors accused Mr. Lee and Samsung executives of manipulating stock prices, raising the price of Cheil and lowering the price of Samsung C&T to create a favorable merger ratio.
After the merger, Mr. Lee became the largest shareholder of the new company, also named Samsung C&T, while this company was a major shareholder of the Samsung Group.
Through the merger, Cheil Industries acquired Samsung C&T, thereby consolidating Lee Jae-yong's control over Samsung Group, then allowing him to take over leadership of the group from his father Lee Kun-hee.
Prosecutors also allege that Mr. Lee was involved in fraudulent auditing at Samsung Biologics, a Cheil subsidiary, to boost Cheil's value ahead of the merger.
In February 2024, the Seoul Central District Court acquitted Mr. Lee and other Samsung officials, saying that Mr. Lee’s succession was not the main purpose of the merger. The court also said there was no evidence that the merger ratio was unfair or caused financial damage to shareholders.
The prosecution appealed and requested a five-year prison sentence and a 500 million won fine, but lost the new ruling. It is unclear whether the prosecution will appeal to the Supreme Court.
Last November, Mr. Lee Jae-yong declared in court that he never intended to deceive or cause damage to investors for personal gain.
However, Mr. Lee served an 18-month prison sentence in 2017 for bribing former South Korean President Park Geun-hye and her confidants to gain government support for the merger. He was pardoned by then-President Moon Jae-in in 2021.
Source: https://thanhnien.vn/chu-tich-samsung-duoc-tuyen-trang-an-185250203144007347.htm
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