Photo: Lee Jae-yong (center) exits the court. Credit: Yonhap News.
On February 5, the Seoul Central District Court 서울중앙지방법원 found Lee Jae-yong 이재용 not guilty of 19 criminal charges, including bribery and accounting fraud in the process of inheriting control of the Samsung Group 삼성그룹 from his father Lee Geon-hee 이건희 in 2015. The younger Lee was charged with orchestrating a merger between Cheil Industries 제일모직, which he controlled, and Samsung C&T 삼성물산, which held shares in key Samsung affiliates including Samsung Electronics 삼성전자.
A heavily imbalanced merger deal allowed Lee’s Cheil to acquire C&T - and through it, the entire Samsung Group - on the cheap, at a significant loss to Samsung C&T shareholders. Lee was accused of bribing then-president Park Geun-hye 박근혜, who ordered the National Pension Service 국민연금, a major C&T shareholder, to vote in favor of the merger despite suffering massive losses in the process.
Lee’s acquittal is inconsistent with several criminal cases that were already prosecuted. Park Geun-hye was sentenced to prison for taking bribes from Lee, and Park’s Health Minister Mun Hyeong-pyo 문형표 and NPS head Hong Wan-seon 홍완선 were sentenced to prison for fraudulently railroading the NPS to vote in favor of the loss-causing merger. An UNCITRAL arbitration tribunal likewise found that the South Korean government, at the behest of Park Geun-hye, caused losses to Elliott Management, a major Samsung C&T shareholder, through the merger.
