© Reuters. Samsung Electronics Chairman Jay Y. Lee arrives at a court in Seoul, South Korea, February 5, 2024. REUTERS/Kim Soo-hyeon
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By Joyce Lee
SEOUL (Reuters) -Samsung Electronics Chairman Jay Y. Lee was found not guilty of accounting fraud and stock manipulation by a Seoul court on Monday in a case about a 2015 merger of Samsung affiliates that prosecutors said was designed to cement his control of the tech group.
Prosecutors had asked for a five-year jail term last November. Lee denied wrongdoing, arguing that he and other executives acted on the belief the merger would benefit shareholders.
The surprise ruling could still be appealed by prosecutors.
The sentence prevents a return to jail for Lee who was convicted in 2017 of bribing a friend of former President Park Geun-hye. He served 18 months of a 30-month sentence and was pardoned in 2022 by current President Yoon Suk Yeol with the government saying he was needed to help overcome a “national economic crisis”.
In the merger case, prosecutors accused Lee, 55, and other former executives of violating the Capital Markets Act to engineer a merger between Samsung C&T and Cheil Industries that rode roughshod over the interests of minority shareholders.
Prior to merger, the Lee family and related entities controlled Cheil but not Samsung C&T which was a major shareholder in Samsung Electronics (KS:) – the crown jewel in the Samsung Group.
South Korea’s biggest conglomerates are still owned and controlled by their founding families and the public has long veered between anger over their many scandals and recognition that the families are responsible for much of the country’s economic success.
As of end-September, the Lee family and related entities owned 20.7% of Samsung Electronics.
