'Unfair Merger and Accounting Fraud Allegations' Lee Jae-yong Supreme Court Verdict... Acquitted in 1st and 2nd Trials

[Financial News] The Supreme Court's judgment on Lee Jae-yong, chairman of Samsung Electronics, who was acquitted in the 1st and 2nd trials after being prosecuted for allegations of unfair merger and accounting fraud, will be announced today.
The Supreme Court's 3rd Division (Presiding Judge Oh Seok-jun) will proceed with the final appeal hearing for Lee, who was indicted for violating the Capital Markets Act and other charges, at 11:15 a.m. on the 17th.
It has been 4 years and 10 months since Lee was prosecuted in September 2020, and 5 months since the 2nd trial verdict.
Lee was prosecuted for allegedly illegally intervening in the merger process of Samsung C&T and Cheil Industries in 2015 to secure management succession and strengthen group control.
The prosecution suspects that during the merger process, Cheil Industries' stock price was inflated while Samsung C&T's stock price was lowered. At that time, Lee held a 23.2% stake in Cheil Industries but had no stake in Samsung C&T, which was a holding company. The prosecution argues that the merger ratio was made favorable to Lee so that he could stably secure Samsung C&T shares.
In this process, the prosecution believes that company-wide illegal activities were carried out, including △spreading false information △concealing important information △buying major shareholders △illegal lobbying to secure voting rights of the National Pension Service △stock price manipulation through concentrated repurchase of treasury shares.
Lee is also accused of being involved in the 4.5 trillion won accounting fraud of Samsung BioLogics, a subsidiary of Cheil Industries, to avoid controversy that the merger was unfavorable to Samsung C&T.
The 1st trial acquitted Lee of all 19 charges. The 1st trial court stated, "The main purpose of the merger cannot be concluded as solely to strengthen Lee's management rights and Samsung Group succession," and "There was a rational business purpose, and it was beneficial to Samsung C&T and its shareholders."
Choi Ji-sung, former head of Samsung Group's Future Strategy Office, Kim Jong-jung, former head of the strategy team of the Future Strategy Office, Jang Choong-ki, former deputy head of the Future Strategy Office, and 13 others who were also prosecuted were acquitted.
The 2nd trial's judgment was the same. The 2nd trial court stated, "The evidence is not sufficient to exclude reasonable doubt to prove the prosecution's case," and acquitted Lee and others as in the 1st trial.
The prosecution appealed to the Supreme Court against Lee and 14 others through the Criminal Appeal Review Committee. According to the Supreme Prosecutors' Office regulations on the operation of the Criminal Appeal Review Committee, if the prosecutor wants to appeal when all charges are acquitted in both the 1st and 2nd trials, they must request a review from the committee.

jisseo@fnnews.com Seo Min-ji Reporter