Samsung Electronics Co. Executive Chairman Jay Y. Lee scored a major victory Monday after a Seoul court acquitted him of stock manipulation charges, finally removing the threat of prison that has dogged the billionaire for years .
A Seoul Central District Court judge issued the verdict after about an hour of reciting the ruling, which focused on whether the evidence indicated that Lee manipulated a deal years ago to gain more influence within Samsung. His acquittal lifts a burden from the world’s largest maker of memory and display chips, which is struggling with a global recession and a stiff challenge from Apple Inc. in smartphones and SK Hynix Inc. in the nascent field of artificial intelligence .
Lee, 55, has been embroiled in legal battles for years that have shaken the tech establishment and triggered a political scandal that led to the impeachment of former President Park Geun-hye. In November, prosecutors sought a five-year prison sentence along with a 500 million won ($376,000) fine for Lee on charges of stock price manipulation and accounting fraud. The charges were linked to the controversial 2015 merger of two Samsung affiliates that prosecutors said helped consolidate Lee’s control over the conglomerate.
Special prosecutors first indicted him in 2017 on separate charges of bribery and corruption, alleging that Samsung provided horses and other payments to a Park confidant in exchange for government support for his succession. He was convicted and spent time in and out of prison until he was released on parole in 2021.
In 2022, he received a presidential pardon over corruption charges, allowing him to formally take the helm of the conglomerate created by his grandfather in 1938.
Monday’s case was linked to the original charges and concerned whether Lee and Samsung used illegal means to help him take control of the Samsung Group, which also includes shipbuilding, construction and finance. Lee has denied any wrongdoing and in his closing argument in November called for the chance to lead South Korea’s largest company at a time of heightened geopolitical risks and technological upheaval.
The verdict is particularly encouraging for a company struggling to find a way out of the global collapse of smartphones and memory chips that has engulfed the industry’s biggest players for more than a year. In January, Samsung reported its fourth consecutive quarter of profit decline, underscoring the extent to which its fortunes have declined along with macroeconomic and demand declines.
At the same time, the company finds itself in the unusual position of having to play catch-up to SK Hynix, which has made great strides in the promising field of high-bandwidth memory. Such HBM chips are used to help Nvidia Corp.’s accelerators train artificial intelligence models.
Samsung said HBM sales rose more than 40% in the December quarter and that demand for memory showed signs of recovery, with mobile device shipments expected to grow.