A South Korean court docket on Monday acquitted Lee Jae-yong, Samsung’s prime government, on expenses of inventory worth manipulation and accounting fraud, the newest twist within the billionaire’s authorized troubles tied to a merger that helped him safe management of the nation’s largest firm.
Prosecutors had sought a jail sentence of 5 years and a fantastic of 500 million received towards Mr. Lee, 55. He has denied any wrongdoing.
Samsung is the most important and most profitable of the South Korean conglomerates often called chaebol. The group’s electronics arm, Samsung Electronics, alone accounts for about one-sixth of the nation’s exports. Mr. Lee, also called Jay Y. Lee, is South Korea’s wealthiest particular person in accordance with Bloomberg Information, which estimated his net worth at about $9 billion.
Some South Koreans converse proudly of the chaebol for having helped rework the nation from a war-ravaged agrarian economic system into a worldwide export powerhouse. However others have more and more scrutinized whether or not they stifle smaller companies or make corrupt offers with authorities officers with out going through sufficient repercussions.
Most chaebol scandals have stemmed from the households’ makes an attempt to make sure that the next generation inherits control, resembling arranging for scions to purchase shares of subsidiaries at discounted costs.
Mr. Lee’s authorized troubles started when huge protests in Seoul led to the 2016 impeachment of former President Park Geun-hye on expenses of amassing or looking for bribes from Samsung and different chaebol and for abusing her energy. Ms. Park was jailed in 2017 and pardoned and launched in 2022.
Mr. Lee was arrested in 2017 on expenses of bribing Ms. Park and her confidante, Choi Quickly-sil, to win the federal government’s assist for a 2015 merger of two Samsung subsidiaries on the heart of the corruption scandal. He was the vice chairman of Samsung Electronics on the time.
Prosecutors had mentioned the merger was a step in Mr. Lee’s effort to switch the management of Samsung from his father, Lee Kun-hee, who was incapacitated by a heart attack in 2014 and had been twice convicted and pardoned of bribery and tax evasion years earlier than. A New York-based hedge fund, Elliott Administration, launched a campaign urging shareholders to vote towards the merger. However the nation’s Nationwide Pension Service, which was a significant shareholder of one of many subsidiaries, voted in favor of the merger in return for Mr. Lee’s bribes, prosecutors mentioned.
A Seoul district court docket in 2017 sentenced Mr. Lee to 5 years in jail for providing 8.9 billion received in bribes to Ms. Park and to Ms. Choi.
His case wound its approach by the court docket system over the following two years, with Seoul’s Excessive Courtroom decreasing his sentence and releasing him from jail in 2018. The nation’s Supreme Courtroom ordered a retrial in 2019.
Whereas he waited for the retrial in 2020, Mr. Lee was indicted on a cost of inventory worth manipulation and accounting fraud, the case whose verdict was introduced on Monday. However prosecutors had been unable to arrest him as a result of a court docket had refused to difficulty an arrest warrant.
The prosecutors had accused Mr. Lee and different present and former Samsung officers of committing these crimes within the 2015 merger. His legal professionals mentioned the merger had taken place in accordance with the legislation.
Throughout the retrial on the bribery expenses in 2021, the Seoul Excessive Courtroom sentenced Mr. Lee to 2 and a half years in jail, discovering the bribes had totaled 8.6 billion received.
Later that yr, the Justice Ministry released him on parole, together with 800 different prisoners, on a vacation commemorating the top of Japan’s colonial rule over Korea on the finish of World Warfare II. South Korea typically paroles or pardons prisoners on essential nationwide holidays.
Enterprise analysts had been cut up on whether or not Mr. Lee’s time in jail had an influence on his empire. Samsung Electronics grew to become the world’s most worthwhile know-how firm whereas he was in jail. Others mentioned Samsung was suspending key choices with Mr. Lee in jail and fell behind rivals like TSMC.
On the time of his launch in 2021, he was nonetheless banned from employment at Samsung for 5 years. That was lifted in 2022 when he received a pardon from President Yoon Suk Yeol, who as a prosecutor had led the investigation of Mr. Lee.
Two months later, Samsung Electronics named Mr. Lee executive chairman, elevating him lower than 15 months after he was launched from jail for bribery.