Samsung leader cleared of fraud charges after winning appeal

Samsung’s executive chairman Jay Y. Lee has been cleared of criminal charges by South Korea’s second-highest court, Bloomberg reported. Earlier on Monday, the Seoul High Court upheld an earlier decision acquitting Lee of stock manipulation and accounting fraud charges over a 2015 merger. The ruling will allow Lee to focus on Samsung’s mobile and chip businesses, which have seen declining profits over the past couple of years. Yee has consistently denied committing any crimes.

The prosecution can still appeal to the Korea’s Supreme Court, but that would be unlikely to succeed since no new arguments could be presented, experts say. “It has been a very long time in the investigation and trial of this case,” said Samsung lawyer Kim You Jin in a statement. “We hope that with this verdict, the defendants can now focus on their work.”

Back in 2017, prosecutors accused Lee of manipulating the share price of two Samsung subsidiaries to smooth the way for a merger that allowed him to consolidate his power. In early 2024, however, the court ruled that the prosecutors failed to prove that. “It is hard to say that Lee Jae-yong [aka Jay Y. Lee]… spearheaded the merger, and that the merger was done just for the sake of Lee’s succession,” a judge stated in the ruling.

At the time, the decision was hailed by business groups, but not everyone in the country agreed. “The ruling will free Lee of legal risks, but I am at a loss for words in terms of the country’s economic justice,” Park Ju-geun, head of corporate thinktank Leaders Index, told The Financial Times in February 2024. “This goes totally against all previous court rulings on the merger.”

Lee was originally sentenced to five years in prison in 2017 after being found guilty of bribing public officials over the same merger, but the Supreme Court overturned that decision and ordered the case to be retried. In that retrial, Lee was sentenced to two-and-a-half years of prison time in early 2021, then paroled half a year later (Korea’s former president Park Geun-hye also went to jail for her role in the same affair.) In 2022, Lee was pardoned by South Korean President Yoon Suk Yeol, who was himself recently impeached and charged with insurrection over a martial law attempt.