Jay Y. Lee, who was accused of manipulating the prices of the stock and committing fraud back in 2015, is now declared free of these allegations in the recent hearing related to this case. It is one of the biggest and most significant legal achievements for the tech giant as they have faced several critical problems, including financial loss as well as reputation due to this case. As Lee is now free of allegations, it will surely impact the company’s reputation positively to progress further.
In 2015, Samsung made enormous revolutions in its working strategy to expand its business. It has signed a deal with numerous affiliates as a part of its policy. Lee was the vice-chairman of the company at that time. He, along with other shareholders of the company, has invested in the stocks of different enterprises, including the likes of Samsung C&T, Samsung’s textile affiliate, and Cheil Industries inside the conglomerate.
The South Korean prosecutors have alleged Jay Y. Lee and other executives increased the stock price of these affiliate companies during the affiliation process to maximize their control over them. Also, this manipulation will benefit Lee immensely and increase his control over Samsung Electronics.
Besides, Lee was also accused of getting involved in an accounting fraud worth $3.9 billion inside Samsung Biologics and its biopharmaceutical unit. These allegations were also part of the same case.
In the hearing in November 2023, the prosecutors appealed to sentence Lee to a jail spanning five years, charging him a fine of $375,000 for violating the Capital Markets Act. They have claimed that Lee has committed fraud and stock manipulation in the $8 billion merger to enhance his control of the tech giant.
Lee’s Defense and Court Ruling
Lee took a stand on his merger activities and kept on claiming that the affiliation and associated accounting procedure were part of routine management activities. Additionally, he stated that he didn’t pocket any personal gain from the merger as it was crucial only for the growth of Samsung according to its strategic growth planning.
The South Korean court has removed all the allegations from Lee and declared him not guilty of the acquisitions claimed by the prosecutors on accounting fraud and manipulating the stock price. Moreover, the court has confirmed that the accounting and affiliations were part of Samsung’s strategic growth practices.
The lawyer of Jay Y. Lee has also stated that ruling out these allegations has proved that the merger of 2015 was totally legit and only for the sake of Samsung’s growth. Moreover, he said that he is thanking the court for making the judicious decision.
The court’s ruling on the allegation has validated the legitimacy of the Samsung shareholders. However, the prosecutors can still make appeals against the decision. Above all, Lee still has to face some legal complications as he has spent 18 months in prison before getting parole in 2021.