Samsung Electronics Chair Lee Jae-yong walked free from years of legal battles on Monday, after an appellate court cleared him of stock-rigging and accounting fraud charges related to the 2015 merger of Samsung affiliates. With his legal troubles behind him, Lee is expected to focus on spearheading the tech giant through its various business challenges.
Conflict origins
Lee’s legal troubles trace back to the contentious merger of two Samsung affiliates: Samsung C&T and Cheil Industries. The deal, which exchanged three shares of Samsung C&T for one share of Cheil Industries, is widely seen to have cemented Lee’s control over the sprawling Samsung empire. At the time, Lee held a 24.2 percent stake in Cheil but had no shares in Samsung C&T. The deal effectively made him the largest shareholder of the merged Samsung C&T, the de facto holding firm of Samsung Group.
Prosecutors had argued that Lee intentionally undervalued Samsung C&T while inflating Cheil Industries, aimed at taking control of the conglomerate at a lower cost and paving the way for the succession of the family-controlled business from his father Lee Kun-hee, who had suffered a heart attack in 2014.
Legal battles and timeline
Legal disputes started with the political scandal that impeached President Park Geun-hye in 2016. In 2017, Lee was convicted of bribing Park and her confidant to win government support for the merger and was jailed for 18 months. He was later released on parole in 2021 and ultimately pardoned in 2022.
Below is a timeline of key events.
Sept. 1, 2015: The merger of Samsung C&T and Cheil Industries is finalized, despite opposition from minority stakeholders like Elliott Management arguing it undervalued the company and investors’ interest.
Feb. 28, 2017: Prosecutors indict Lee on bribery and embezzlement charges linked to the political scandal that impeached President Park.
Aug. 25, 2017: Court sentences Lee to five years in prison.
Feb 5, 2018: Lee is released from prison after an appeals court reduces his sentence to 2 1/2 years and suspends it.
Aug. 19, 2019: The Supreme Court overturns the lower court’s ruling and remands Lee’s case back for retrial.
Sept. 1, 2020: Lee and other Samsung officials are indicted on charges of stock manipulation and accounting fraud related to the 2015 merger.
Jan. 18, 2021: Court sentences Lee to 2 1/2 years in prison in the retrial of his corruption case, returning Lee to jail.
Aug. 9, 2021: Lee is released from prison on parole.
Aug. 12, 2022: Lee receives a special presidential pardon.
Nov. 17, 2023: Prosecutors seek a five-year prison sentence and a 500 million won ($350,000) fine on financial crime charges related to the 2015 merger.
Feb. 5, 2024: Lee is acquitted in the initial trial, but prosecutors later appeal the decision.
Nov. 25, 2024: Prosecutors again seek a five-year prison sentence and a fine in the appeals trial.
Feb. 3, 2025: The Seoul High Court rules Lee not guilty on all financial crime charges in the 2015 merger case.
What was at stake?
Observers believe Lee’s prolonged legal entanglements have disrupted Samsung’s business. The uncertainty around his leadership has undermined Samsung’s global competitive edge, preventing it from making bold investments in industries that move at breakneck pace. At a time when strategic agility is crucial, Samsung has often opted for stability over risk-taking, falling behind rivals in key sectors.
What's next?
With his legal uncertainties behind him, Lee is expected to shift focus to addressing Samsung’s pressing challenges, particularly its disappointing earnings and the pivotal artificial intelligence chips sector.
Lee is tasked with securing cutting-edge technology and catching up with rivals like SK hynix in the AI chips race, while crafting a compelling new vision for the company's future.
Lee wasted no time after his recent acquittal, meeting with OpenAI CEO Sam Altman and SoftBank Group head Masayoshi Son to discuss collaboration in AI on Tuesday.
