Samsung chief Lee Jae-yong was found not guilty by a Seoul court on Monday on charges of stock manipulation and accounting fraud connected to a controversial merger in 2015 of two Samsung affiliates.
The acquittal comes as a major relief to the chairman of Samsung Electronics, who has been embroiled in legal problems for years.
Last year, South Korean prosecutors had asked for a five-year jail term for Lee, alleging that he and other executives inflated the stock price of a textile company, Cheil Industries, and devalued a construction and engineering company, Samsung C&T.
They alleged that the merger of the two firms allowed Lee to gain a tighter grip on Samsung Electronics, the group’s flagship company. Lee’s attorneys had denied any wrongdoing, saying the merger had helped the management of the conglomerate became more stable.
Seoul Central District Court chief judge Park Jeong-je said there was not enough evidence that Samsung had intended to cause losses to Samsung C&T and its shareholders through the merger.
“Even if Lee’s control has been strengthened, the merger in this case cannot be considered unfair, as long as there is a reasonable purpose for the merger,” Park said. It’s unclear if prosecutors will appeal this ruling, which has come as a surprise to experts.
“It is a totally shocking verdict,” Park Sangin, economics professor at Seoul National University, told CNN. He added the decision will “lead to lowering the confidence of foreign investors in the Korean legal system and the soundness of the Korean capital market.”
— CutC by cnn.com
