Top Samsung Electronics executive acquitted of stock manipulation charges
According to CNN, Lee Jae-yong, a billionaire and the head of Samsung Electronics, was acquitted by a Seoul court today of stock manipulation and accounting fraud related to the merger of two Samsung affiliates back in 2015. The executive allegedly was involved with other Samsung executives in a scheme to artificially inflate the stock price of textile company Cheil Industries, while at the same time devaluing the stock price of Samsung C&T, a construction company, before their merger.
The prosecutors claimed that by completing the merger, Lee would be able to get tighter control over Samsung Electronics, the flagship company of the group. Lee's attorneys refuted that claim and said that the merger was completed to help stabilize the management of the huge conglomerate.
There was not enough evidence to show that Samsung had planned to cause losses for stockholders of Samsung C&T and the affiliate itself according to Seoul Central District Court Chief Judge Park Jung-jae. The judge stated, "Even if Lee’s control has been strengthened, the merger in this case cannot be considered unfair, as long as there is a reasonable purpose for the merger."
The recently released Samsung Galaxy S24 Ultra
In a different case, Lee was found guilty of bribery and other corruption charges back in 2017 and was sentenced to five years in prison. He was released after less than a year in prison because an appeals court threw out several of the charges against him and suspended his sentence. In January 2021, Lee was sent back to prison after being found guilty by the Seoul High Court of embezzlement and bribery. He was released on parole in August 2021 and pardoned a year later.
Talking about today's verdict, Park Sangin, economics professor at Seoul National University, said, "It is a totally shocking verdict." Sangin also said that the decision will "lead to lowering the confidence of foreign investors in the Korean legal system and the soundness of the Korean capital market."
Samsung recently released its flagship smartphone series for 2024, the Galaxy S24 line. For all of 2023, Samsung fell behind Apple to finish as the second-largest smartphone manufacturer in the world after spending many years at the top. It has reported a lower profit for four consecutive quarters thanks to lower demand for electronic devices and the chips that power them.
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