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Court finds no improper or fraudulent acts in Samsung merger

Court finds no improper or fraudulent acts in Samsung merger

Posted February. 09, 2024 07:35,   

Updated February. 09, 2024 07:35


On Monday, the Seoul Central District Court acquitted Lee Jae-yong (56), chairman of Samsung Electronics, of all charges related to the merger of Cheil Industries Inc. and Samsung C&T Corp. It was found on Thursday that the court held that it could not be seen as Lee used improper methods or fraudulent means for the merger. The court dismissed the prosecutors' allegation that the 2015 merger was unlawful, asserting that it was a move by Lee to secure control of Samsung Group. However, the prosecution appealed the court's decision on Thursday, stating that “they have a significantly different view on the issue.”

According to the 1,614-page A4 paper document of the first trial, confirmed by The Dong-A Ilbo on Thursday, the Criminal Division of the Seoul Central District Court held that it cannot be said that Lee used improper means, plans, or techniques, or used fraudulent means for the merger, in response to prosecutors' allegations that Lee induced former President Park Geun-hye's unfair intervention in the merger. “It cannot be concluded that the purpose of the merger was only to strengthen Chairman Lee's control and succeed Samsung Group, but also for business purposes,” the court stated. The court acknowledged that Samsung C&T sought to merge with Cheil Industries to secure new growth engines.

The court found that the prosecution's last-minute addition of the Breach of Trust charge cannot be recognized as damage only with an abstract possibility. While the prosecution argued that shareholders lost the opportunity for profit due to the unjust merger, the court found that “strengthening group control and stabilizing management through the merger is also in the interest of Samsung C&T and its shareholders.” Additionally, the court rejected the admissibility of Samsung BioLogics and Samsung Bioepis servers seized by the prosecution, stating that they “violated the principle of warrant requirement by failing to go through the proper screening process.”

Dong-Jun Heo hungry@donga.com