South Korea’s top court yesterday cleared Samsung Electronics chairman Jay Y. Lee of accounting fraud and stock manipulation, permanently removing a long-running legal risk for the head of the country’s biggest company.
The Supreme Court upheld an appeals court’s ruling dismissing all charges in the case involving a US$8 billion merger in 2015, freeing Lee to focus on Samsung’s push to catch up in a global race to develop cutting-edge artificial intelligence chips.
A lower court last year had also cleared Lee of the charges relating to a deal between two Samsung affiliates, Samsung C&T and Cheil Industries, which prosecutors said was designed to cement Lee’s control of the tech giant.
Photo: Reuters
“The Supreme Court ruling clears a layer of legal uncertainty, which could be a long-term positive for Samsung,” said Ryu Young-ho, a senior analyst at NH Investment & Securities.
“It remains to be seen how directly and proactively he will engage going forward, but if the owner takes a more active role, it could allow management to focus more on long-term initiatives rather than short-term results,” Ryu added.
Samsung Electronics shares closed up 3.1 percent, outperforming a near-flat benchmark KOSPI.
Analysts attributed the rise to the removal of legal uncertainty surrounding Samsung, as well as investors switching to the company after Goldman Sachs downgraded local rival SK Hynix, sending its shares down as much as 9.5 percent.
The Supreme Court verdict was widely expected, but comes at a critical moment for Lee, who has faced mounting questions about his ability to lead Samsung Electronics — the world’s top memorychip and No. 2 smartphone maker.
For nearly a decade, Lee has faced legal challenges, including those from the merger that paved the way for his succession after his father, Lee Kun-hee, had a heart attack in 2014 that left him in a coma.
Jay Y. Lee, 57, spent 18 months in jail for bribery in a separate case related to former South Korean president Park Geun-hye, but was pardoned by then-South Korean president Yoon Suk-yeol.
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