Earlier this week, a court in South Korea announced its verdict in the long-pending case related to the merger of Samsung Group's affiliate companies. It was alleged that Samsung Electronics Chairman Lee Jae-yong was involved in market irregularities and illegally boosting the share price of Cheil Industries, one of Samsung Group's affiliate companies. However, Lee was cleared of those charges. Now, the prosecution has appealed against Lee's acquittal.
Prosecutors, in this case, appealed against the acquittal of Lee Jae-Yong in South Korea earlier today. The Seoul Central District Prosecutors Office filed the appeal, and it said that the controversial merger of Cheil Industries Inc. and Samsung C&T Corp. was done to solidify Lee's position in Samsung Group at a lower cost so that he could become the chairman of Samsung Electronics, the crown jewel of Samsung Group. The prosecution had demanded a jail sentence of five years, but since Lee received a not-guilty sentence from the court, he walked free. The prosecution had one week to file for an appeal, and they filed it today.
In 2015, after then-Samsung chief Lee Kun-hee suffered a major heart attack, Samsung officials started the merger of Cheil Industries and Samsung C&T. Cheil Industries is Samsung Group's affiliate firm that is into fashion, textiles, chemicals, and even marketing. Samsung C&T is a holding company of Samsung Electronics, and it is into construction, engineering, fashion, and trading. Chiel Industries agreed to acquire Samsung C&T for $7.7 billion. It was alleged that high-ranking Samsung officials, including Lee Jae-yong, were involved in illegal market practices to keep the stock prices of Chiel Industries higher and lower the stock prices of Samsung C&T so that the merger could be done at a lower cost.
Lee spent 18 months in prison in another case involving bribing a close associate of former South Korean president, and he was released from jail in 2021 after a presidential pardon was granted to him.
