'Unfair Merger Allegations' Lee Jae-yong Acquitted... 10-Year Judicial Risk Resolved [Comprehensive]

[Financial News] Lee Jae-yong, Chairman of Samsung Electronics, who was put on trial for allegations of unfair merger and accounting fraud, was acquitted by the Supreme Court, resolving the 'judicial risk' that had persisted for 10 years since the merger of Samsung C&T and Cheil Industries.
The Supreme Court's 3rd Division (Presiding Judge Oh Seok-jun) confirmed the original verdict of acquittal for Lee, who was indicted for violating the Capital Markets Act and the Financial Investment Services and Capital Markets Act, among other charges.
Choi Ji-sung, former head of Samsung Group's Future Strategy Office, Kim Jong-joong, former strategy team leader of the Future Strategy Office, Jang Choong-ki, former deputy head of the Future Strategy Office, and the remaining 13 defendants who were also put on trial were acquitted.
It has been 4 years and 10 months since Lee was put on trial in September 2020, and about 5 months since the 2nd trial verdict.
The Supreme Court stated, "There is no error in the original verdict that violates the principles of logic and experience or misunderstands the legal principles related to the Capital Markets Act and the External Audit Act without conducting necessary hearings."
Lee was put on trial for allegedly illegally intervening in the merger process of Samsung C&T and Cheil Industries in 2015 to strengthen management control and group dominance.
The prosecution suspected 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, and it was alleged that the merger ratio was made favorable so that Lee could secure Samsung C&T's stake stably.
In this process, the prosecution judged that company-level illegal activities such as △spreading false information △concealing important information △buying major shareholders △illegal lobbying to secure the voting rights of the National Pension Service △stock price manipulation through concentrated purchase of treasury stocks were carried out.
Lee was also charged with 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 first trial acquitted Lee of all 19 charges. The first trial court judged, "It cannot be concluded that the main purpose of the merger was solely to strengthen Lee's management control and succession of Samsung Group," and "There was a reasonable business purpose, and there were aspects that benefited Samsung C&T and its shareholders."
The second trial also maintained the first trial's judgment, stating that "the evidence was not proven beyond a reasonable doubt to prove the charges."
The prosecution filed an appeal against Lee and 14 others through the Criminal Review Committee, but the Supreme Court's judgment did not change.
Lee's legal team stated, "The final judgment of the Supreme Court clearly confirmed that the merger of Samsung C&T and the accounting treatment of Samsung Biologics were lawful," and "We sincerely thank the court for their wise judgment through thorough hearings over 5 years."

jisseo@fnnews.com Seo Min-ji Reporter