A South Korean court ruled on Monday that Jay Y. Lee, executive chairman of Samsung Electronics, is not guilty of manipulating stock prices and cheating on taxes linked to the 2015 merger of Samsung affiliates.
At the November hearing, authorities wanted Lee to spend five years in jail and pay a fine of 500 million KRW ($375,000). They said he broke the Capital Markets Act by manipulating stocks and lying about finances related to a 2015 $8 billion merger of Samsung companies. South Korean authorities said the merger helped Lee take control of the huge Korean tech company.
At the meeting in November, Lee denied doing anything wrong and said that the merger and accounting processes were normal parts of running the business. Lee also said that he had never gotten anything personally out of the merger and that he had never tried to hurt other shareholders to get a bigger part of Samsung’s affiliate.
There is still a chance that officials will appeal the decision.
Case Of A Merger in 2015
South Korean officials say there are three main things to remember. South Korean prosecutors say Lee, who was vice-chair of Samsung Electronics in 2015, and other executives at the company inflated the stock price of Samsung’s textile subsidiary Cheil Industries and depreciated the stock price of Samsung’s construction subsidiary Samsung C&T during the merger. This is illegal, but Lee did it to get more power over Samsung Electronics, the prosecutors said.
Attorneys for Samsung say that the merger process was hard on the owners of Samsung C&T.
Because of the same case, Lee is also accused of a $3.9 billion financial fraud at Samsung Biologics, the biopharmaceutical division of Samsung.
“The ruling made it clear that the merger of Samsung C&T and Cheil was legal, as well as Samsung Biologics’ accounting,” Lee’s lawyer said in a statement. “I really want to thank the court for its wise decision.”
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The CEO of Samsung was found guilty of bribing Park Geun-hye, the former president of South Korea, in a separate case connected to the merger. Lee spent 18 months in prison from 2017 to 2021. In 2021, he was released on parole, and in 2022, the president gave him a pardon.
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