South Korea's Supreme Court on Thursday upheld the acquittal of Samsung Electronics Chairman Lee Jae-yong on charges of stock manipulation and accounting fraud related to a controversial $8 billion merger in 2015, ending nearly a decade of legal uncertainty for the country's most powerful business executive.
The ruling affirmed decisions by lower courts that prosecutors failed to prove Lee had engaged in illegal conduct in orchestrating the merger between Samsung C&T and Cheil Industries, two affiliates of the Samsung Group. The deal was widely viewed as a critical step in consolidating Lee's control over the conglomerate following his father's incapacitating heart attack in 2014.
Samsung shares rose 3.1% on the news, outperforming the broader KOSPI index, as investors welcomed the removal of a major legal overhang. "The Supreme Court ruling clears a layer of legal uncertainty, which could be a long-term positive for Samsung," said Ryu Young-ho, senior analyst at NH Investment & Securities.
Samsung's legal team said in a statement they were "sincerely grateful" for the decision, which they said confirmed that "the merger was legal." Business lobby groups such as the Korea Enterprises Federation praised the ruling as a stabilizing development for the South Korean economy, noting Samsung's critical role amid intensifying global competition in AI and semiconductors.
Lee, 57, has served as de facto leader of the Samsung Group since 2014 and was officially named chairman of Samsung Electronics in 2022. He previously served 18 months in prison for a separate bribery case linked to the same 2015 merger, in which he was convicted of offering illicit payments to then-President Park Geun-hye and her associate to gain government backing. Lee was paroled in 2021 and later pardoned by President Yoon Suk Yeol in 2022.
The court's decision marks a turning point for Samsung, which is facing intensifying challenges in its core semiconductor business. Earlier this month, the company forecast a 56% drop in second-quarter operating profit, citing sluggish AI chip demand.
"He must both defend Samsung's core businesses and find new growth engines," said Park Ju-gun, head of corporate analysis firm Leaders Index.
Critics of the 2015 merger argued it unfairly benefited the Lee family at the expense of minority shareholders. Despite the controversy, the deal was approved with government backing-an outcome later linked to the bribery charges.
