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A South Korean court docket on Monday acquitted Lee Jae-yong, Samsung’s prime govt, on fees of inventory value 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.
A Seoul district court docket choose stated that there was not sufficient proof to show the prosecutors’ fees in opposition to Mr. Lee and 13 different present and former Samsung officers, together with the accusation that the first intent of the merger was to strengthen Mr. Lee’s energy over the conglomerate, in opposition to the enterprise pursuits of every Samsung affiliate that merged.
Prosecutors had sought a jail sentence of 5 years and a wonderful of 500 million received in opposition to Mr. Lee, 55. He has denied any wrongdoing. Prosecutors have the choice to enchantment the choice to the next court docket. Neither Samsung Electronics nor the prosecutors’ workplace instantly commented after the decision.
Mr. Lee’s attorneys stated in an announcement that the choice “clearly confirmed the legality” of the merger and the accounting of its associates.
Samsung is the biggest and most profitable of the South Korean conglomerates generally known as chaebol. The group’s electronics arm, Samsung Electronics, alone accounts for about one-sixth of the nation’s exports. Mr. Lee, often known as Jay Y. Lee, is South Korea’s wealthiest particular person based on Bloomberg Information, which estimated his web value at about $9 billion.
Some South Koreans communicate proudly of the chaebol for having helped remodel the nation from a war-ravaged agrarian financial 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 dealing with sufficient repercussions.
Most chaebol scandals have stemmed from the households’ makes an attempt to make sure that the following technology inherits management, resembling arranging for scions to purchase shares of subsidiaries at discounted costs.
Enterprise consultants in South Korea stated that they had been stunned by Monday’s verdict, which they stated raised issues in regards to the equity of the nation’s markets and the credibility of its judiciary.
“This case confirms a judicial system that’s extra backward than it was up to now,” stated Sung-In Jun, an economics professor at Hongik College in Seoul, “and the way powerless the South Korean political and judicial authorities are in entrance of the chaebol.”
Mr. Lee’s authorized troubles started when huge protests in Seoul led to the 2016 impeachment of former President Park Geun-hye on fees of amassing or in search of 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 fees 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 middle of the corruption scandal. He was the vice chairman of Samsung Electronics on the time.
Prosecutors had stated 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 coronary heart assault 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 marketing campaign urging shareholders to vote in opposition to the merger. However the nation’s Nationwide Pension Service, which was a serious shareholder of one of many subsidiaries, voted in favor of the merger in return for Mr. Lee’s bribes, prosecutors stated.
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 method by way of the court docket system over the following two years, with Seoul’s Excessive Court docket lowering his sentence and releasing him from jail in 2018. The nation’s Supreme Court docket ordered a retrial in 2019.
Whereas he waited for the retrial in 2020, Mr. Lee was indicted on a cost of inventory value 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 concern 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 attorneys stated the merger had taken place in accordance with the regulation.
Through the retrial on the bribery fees in 2021, the Seoul Excessive Court docket sentenced Mr. Lee to 2 and a half years in jail, discovering the bribes had totaled 8.6 billion received.
Later that 12 months, the Justice Ministry launched 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 Struggle II. South Korea typically paroles or pardons prisoners on necessary nationwide holidays.
Enterprise analysts had been cut up on whether or not Mr. Lee’s time in jail had an impression on his empire. Samsung Electronics grew to become the world’s most worthwhile know-how firm whereas he was in jail. Others stated 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 govt chairman, elevating him lower than 15 months after he was launched from jail for bribery.
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