Samsung Electronics chairman Jay Y. Lee acquitted in 2015 merger case
Samsung Electronics executive chairman Jay Y. Lee has been declared not guilty by a South Korean court on the charge of stock price manipulation and accounting fraud related to the merger of Samsung affiliates in 2015. In the November hearing, prosecutors had called for Lee to be in jail for five years and a fine of $375,000 over charges of violating the Capital Markets Act.
The South Korean prosecutors alleged the merger helped Lee secure his control of the Korean tech giant. Lee denying his wrongdoing in the hearing last November claimed that the merger and accounting processes were part of the normal management activities for the company. Lee also said he had never had personal gain concerning the merger, while never trying to harm other shareholders to increase his stake in Samsung’s affiliate.
The ruling could still face appeals from prosecutors.
There are three key takeaways the South Korean prosecutors claim. Lee, then vice-chair of Samsung Electronics in 2015, and other executives at the firm inflated the stock price of Cheil Industries, Samsung’s textile affiliate, and depreciated its construction subsidiary, Samsung C&T, during the merger, which is an illegal process to benefit Lee, giving greater control of Samsung Electronics, the South Korean prosecutors claimed.
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