South Korea’s Supreme Court clears Samsung Chairman Lee in 2015 merger fraud case

By Joyce Lee and Hye Kyong Yang

SEOUL (Reuters) – South Korea’s Topcoat cleared Jay Y. Lee, chairman of accounting fraud and stock manipulation on Thursday, permanently removing the long-term legal risks of the country’s largest corporate leader.

The Supreme Court upheld the Court of Appeals’ ruling in 2015 that dismissed all charges in the case that involved a $8 billion merger, focusing on Lee’s push to catch up with Samsung’s global race to develop cutting-edge AI chips.

Last year, the lower court also cleared charges to Lee related to a transaction between two Samsung affiliates, Samsung C&T and Chail Industries.

“The Supreme Court decision clears a layer of legal uncertainty, which could be long-term positive for Samsung,” said Ryu Young-Ho, senior analyst at NH Investment & Securities.

“We don’t know how directly and proactive he will be involved in the future, but if the owner is taking on a more active role, management can be able to focus on long-term initiatives rather than short-term outcomes,” Ryu added.

Samsung Electronics shares closed 3.1%, surpassing the close-range benchmark Kospi.

Analysts attributed the removal of legal uncertainty surrounding Samsung and the fact that investors switched to the company after Goldman Sachs downgrades its local rival SK Hynix and lowers its shares by 9.5%.

The Supreme Court verdict was widely anticipated, but it comes at a critical moment for Lee, facing questions about his ability to lead Samsung Electronics, the world’s top memory chip and second smartphone maker.

Samsung’s lawyers said they “arefully grateful” to the court for the decision, adding in a statement that the ruling confirmed the merger was legal.

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, put him in a coma in 2014.

The billionaires were previously pardoned

The Business Lobby Group welcomed the court’s decision and framed it as a stabilizing development for the Korean economy.

The Korean Federation of Businesses said the ruling removes Samsung’s significant legal burden, and is at a point that intensifies global competition in high-tech industries such as AI and semiconductors, and promotes economic pressure from US trade tariffs.

“Samsung’s role as a major Korean company is more important than ever,” the group said in a statement.