Lee Jae-yong, chairman of Samsung Electronics, was acquitted on the 17th by the Supreme Court regarding the case related to the 'merger suspicion of Samsung C&T and Cheil Industries.' Following the first and second trials, the Supreme Court also ruled that all 19 charges against him were not proven. This is the final ruling issued 4 years and 10 months after he was indicted in September 2020.
The Supreme Court's third division (Chief Justice Oh Seok-joon) announced during the ruling on the appeal of Chairman Lee's case regarding capital market law violations, market manipulation, and breach of trust on that day at 11:15 a.m., stating, "We reject all of the prosecutor's appeals and confirm the not guilty ruling from the second trial." Thirteen defendants, including Choi Ji-sung, former head of Samsung Group's future strategy office, who was also indicted with Chairman Lee, were also acquitted.
Samsung Group merged the two companies on the condition of exchanging one share of Cheil Industries for three shares of Samsung C&T in 2015. The prosecution claims that the evaluation of the merger ratio was conducted excessively to ensure a stable transfer of management rights for Chairman Lee, infringing on shareholder interests, leading to the indictment of Chairman Lee and executives in September 2020.
The prosecution argued that, while Chairman Lee owned 23.2% of Cheil Industries and had no shares in Samsung C&T, a merger was arranged in his favor. To achieve this, efforts were made at the group level to inflate Cheil Industries' company value and lower Samsung C&T's value through methods such as: ▲spreading false information ▲hiding important information ▲issuing false positive news ▲buying major shareholders ▲engaging in illegal lobbying to secure voting rights for the National Pension Service ▲mobilizing the Samsung Securities organization, a subsidiary ▲manipulating the stock price through concentrated buybacks. The prosecutor applied 19 charges against Chairman Lee. In the sentencing hearing in November 2023, the prosecution demanded a 5-year prison sentence and a fine of 500 million won against him.
The first trial ruled all 19 charges against Chairman Lee not guilty in February last year, stating that there was insufficient evidence to accept the prosecutor's indictment. The court did not accept the admissibility of evidence, including an 18-terabyte backup server seized by the prosecution in May 2019 related to accounting fraud allegations against Samsung Biologics and Samsung Bioepis. The prosecution appealed the first trial ruling.
However, the second trial also dismissed the prosecution's appeal on February 4th and upheld the not guilty ruling. The second trial court stated, "The evidence obtained through the prosecution's search, such as the servers from Samsung Bioepis and Samsung Biologics, lacks evidentiary value, and the new evidence submitted during the appeal also lacks evidentiary value."
The second trial also did not recognize the 'accounting fraud allegations against Samsung Biologics,' which were a key issue. The second trial court judged, "It is difficult to find intent for accounting fraud," and noted, "While inappropriate actions such as revealing certain intentions of some defendants or manipulating documents were involved, the outcome was consistent with the economic substance of Samsung Biologics' loss of 'control' over its biosimilar product."
The prosecution also appealed the second trial ruling on February 7th, stating, "There is a difference in opinion between the prosecution and the court regarding the purpose and circumstances of succession of group control via the merger of Samsung C&T and Cheil Industries, and the legal judgment regarding accounting fraud and market manipulation."
However, the Supreme Court ruled that there was no issue with the second trial's judgment, confirming Chairman Lee's acquittal.