Samsung Chief Cleared of Fraud and Stock Manipulation Charges

Samsung Electronics Chairman Lee Jae-yong has been acquitted of fraud and stock manipulation charges related to the 2015 merger between Samsung C&T and Cheil Industries. The Seoul High Court's decision, delivered on February 3, 2025, clears Lee of all 19 charges, including violations of the Financial Investment Services and Capital Markets Act and the Act on External Audit of Stock Companies, as well as breach of duty. The court dismissed the prosecution's appeal, stating that neither the unfair merger charge nor the accounting fraud allegations could be substantiated.



The court's ruling aligns with the original trial verdict, which also acquitted Lee and all other defendants, including Choi Ji-sung, former head of Samsung Group's Future Strategy Office. The court did not acknowledge breach of trust and perjury charges, stating that there was no evidence of collusion or financial damage. Lee's attorney, Kim Yoo-jin, expressed relief following the verdict, stating that it would allow Lee to focus on his original duties.

The acquittal comes at a critical time for Samsung Electronics, as the company grapples with a downturn in its semiconductor business, a core component of its operations. Last year, Samsung's chip business reported an annual operating profit of 15.1 trillion won, lagging behind its smaller crosstown rival SK Hynix's 23.47 trillion won. The foundry business continues to record deficits in the trillions of won, adding to the company's woes.

With the legal uncertainties behind him, Lee is expected to shift his focus to addressing Samsung's disappointing earnings and efforts to catch up with rivals in the pivotal AI chip sector. Industry insiders suggest that the acquittal has established conditions for Lee to fully concentrate on business, allowing Samsung to embark on a new phase of growth through large-scale investments and innovations.

The Korea Chamber of Commerce and Industry, the country's leading business lobby group, welcomed the verdict, stating that it would help Samsung Group, the country's biggest conglomerate, ride out growing uncertainties in the face of rapid changes in the artificial intelligence and semiconductor industries. With the legal distractions behind him, Lee is expected to expand his management scope and focus on discovering new business opportunities, accelerating efforts to overcome Samsung's crisis and prepare for the future.

In conclusion, the acquittal of Samsung Electronics Chairman Lee Jae-yong on fraud and stock manipulation charges related to the 2015 merger between Samsung C&T and Cheil Industries is a significant development for the company and the broader tech industry. With the legal uncertainties removed, Lee can now focus on addressing Samsung's internal and external challenges, making bold investment decisions, and securing Samsung's future in key tech races, such as artificial intelligence (AI) chips like high-bandwidth memory (HBM). The acquittal also has potential implications for Samsung's ability to attract and retain talent, both within the company and in the broader tech industry, as well as its approach to risk management and compliance, particularly in relation to its corporate governance and succession planning.