'Unfair Merger Allegations' Lee Jae-yong 2nd Trial, 'Illegal Funds' Kim Yong Assigned to Dedicated Bench

The second trial panel for Samsung Electronics Chairman Lee Jae-yong, who was indicted on charges of 'unfair merger and accounting fraud' related to management succession, has been decided.

Samsung Electronics Chairman Lee Jae-yong is leaving the courtroom after being acquitted in the first trial related to accounting fraud and unfair mergers at the Seoul Central District Court in Seocho-gu, Seoul, on the 5th. Photo by Kang Jin-hyung aymsdream@

On the 26th, the Seoul High Court assigned Lee's case involving violations of the Capital Markets Act, including fraudulent trading and market manipulation, as well as breach of fiduciary duty, to the Criminal Division 13, which handles corruption cases.

Criminal Division 13 is a collegial panel composed of one presiding judge and two high court judges, and is currently also handling the case of Kim Yong, former deputy director of the Democratic Research Institute, on charges of illegal political funds.

Lee was brought to trial in September 2020 on charges of involvement in various fraudulent transactions, market manipulation, and accounting fraud orchestrated by the Future Strategy Office during the 2015 merger of Cheil Industries and Samsung C&T, aimed at securing management succession at minimal cost and strengthening control.

The Seoul Central District Court Criminal Division 25-2 acquitted Lee of all 19 charges on the 5th, three years and five months after the indictment, in the first trial.

The court ruled that the merger of the two companies was not solely for the purpose of Lee's succession and strengthening control, and therefore could not be deemed unfair overall, nor was there sufficient evidence to recognize that shareholders suffered damages.

In response, the prosecution appealed, stating, "There is a significant difference in views regarding the purpose and circumstances of the group control succession through the Samsung C&T and Cheil Industries merger, the evidence assessment of accounting fraud and fraudulent trading, as well as the factual and legal determinations made in the first trial verdict."

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