The legal troubles surrounding Samsung Chairman Jay Y. Lee may not have disappeared just yet, despite a notable legal victory this week.
Earlier this week a court in Seoul had upheld Jay Y. Lee’s earlier victory on appeal, clearing him of all fraud charges over a controversial merger that took place in 2015.
The Seoul High Court (Criminal Division 13) had on 3 February ruled Lee not guilty of all 19 charges, including allegations of accounting fraud, unfair trading, and stock manipulation.
Prosecutors had argued the controversial $8 billion merger of two Samsung affiliates, namely Samsung C&T and Cheil Industries, was unfairly conducted to “facilitate Jay L. Lee’s succession and strengthened his control over Samsung.” The court however dismissed the prosecution’s appeal in the case.
Appeal planned
Lee had denied wrongdoing, saying he never intended to “deceive or damage investors for personal gain.”
Lee is the third generation of Samsung’s founding family.
Samsung had been founded by Lee’s grandfather back in January 1969.
This week’s victory in the High Court came one year after a South Korean lower court had acquitted Lee of wrongdoing, and nearly four years and five months after Lee had been indicted back in September 2020.
In September 2020, Lee, then the vice chair of Samsung Electronics, along with other former Samsung executives, had been indicted for advocating the merger of Cheil Industries, which was Samsung’s textile affiliate, with Samsung C&T, its construction unit.
All of the former Samsung execs were also found not guilty of the accusations on Monday.
But now Reuters has reported that South Korean prosecutors intend to appeal the High Court ruling to the Supreme Court.
Samsung reportedly declined to comment on the matter.
Legal woes
It has been a testing few years for Samsung’s Jay Y. Lee, who has been the de facto head of Samsung since May 2014, after his father (Lee Kun-hee) then aged 72, suffered an incapacitating heart attack and lapsed into a coma.
Lee Kun-hee remained in a coma (retaining the Samsung chairman title) until he died in 2020, aged 78 years old.
Jay Y. Lee told over the running of the conglomerate, but he ran into trouble in 2017 when the South Korean prosecutor’s office accused Lee of bribery, embezzlement and perjury, relating to alleged bribes of a former president.
In August 2017 Lee was found guilty and sentenced to five years in prison, but this was later reduced to 2.5 years, which was suspended, meaning Lee was released from prison after one year’s detention.
But he was returned to prison in January 2021 after the case was returned to South Korea’s high court.
Seven months later Lee was released from prison in August 2021 on parole after serving 207 days in jail.
His release came amid concerns that without Lee’s presence major decisions were not being made at the conglomerate, which in South Korea is known as chaebol (the country’s business segment is dominated a number of such chaebols).
A year late in August 2022, President Yoon Suk-yeol granted a full pardon to Lee, citing Samsung’s importance to the economy.
And in October 2022 the board of directors at Samsung Electronics approved the appointment of Jay Y. Lee as Executive Chairman of the company.