Lee Jae-yong, Chairman of Samsung Electronics, is seen leaving the Seoul Central District Court in Seocho-gu, Seoul, on February 5 last year. after being acquitted in the first trial regarding allegations of unfair merger and accounting fraud related to Samsung Group’s succession strategy. (Yonhap)
SEOUL, Feb. 8 (Korea Bizwire) — While legal experts believe a Supreme Court reversal is unlikely, the extended legal process means Samsung must continue navigating uncertainties that could affect its strategic decision-making.
The prolonged case may delay key investment decisions and hinder Samsung’s ability to recover from its recent struggles in the semiconductor industry.
A senior business official remarked, “Given the two consecutive acquittals, a Supreme Court reversal seems unlikely, but the prolonged legal uncertainty still poses a significant burden on Samsung.”
Since 2016, Lee has faced legal troubles stemming from the corruption scandal linked to South Korea’s former administration. Over nearly a decade, his legal battles have limited his ability to fully exert leadership at Samsung, impacting major corporate decisions.
Following his acquittal in the appellate court earlier this month, Lee moved swiftly, meeting with key global tech leaders such as OpenAI CEO Sam Altman and SoftBank Group Chairman Masayoshi Son to discuss potential AI business ventures.
The ruling had sparked optimism for a more aggressive business expansion strategy, but the prosecution’s appeal now threatens to slow Samsung’s momentum once again.
Lee Jae-yong, Chairman of Samsung Electronics, is seen stepping out of his car to attend the appellate trial verdict hearing on allegations of unfair merger and accounting fraud at the Seoul High Court in Seocho-gu, Seoul, on February 3. (Yonhap)
Potential Delays in Leadership and Business Moves
Samsung had postponed discussions on Lee’s return as a registered board member due to the legal risks. With the case now heading to the Supreme Court, there is growing speculation that his formal reinstatement will be further delayed.
Lee remains the only non-registered executive among the heads of South Korea’s four major conglomerates.
Industry insiders also worry that Samsung’s unresolved legal risks could impact critical investment and M&A decisions. One executive noted, “Major strategic moves, including large-scale investments and acquisitions, may be postponed until after the Supreme Court ruling.”
Lee was originally indicted in September 2020 over allegations that he played a key role in Samsung C&T’s 2015 merger with Cheil Industries, a deal designed to solidify his control over the Samsung empire.
Prosecutors accused him of stock manipulation, accounting fraud, and other financial irregularities, all of which the lower courts dismissed.
In February 2024, the district court found Lee not guilty on all 19 charges, and the appellate court upheld this ruling earlier this month. However, with prosecutors now escalating the case to the Supreme Court, the final verdict remains uncertain, further prolonging Samsung’s legal and management challenges.
Samsung Electronics is facing declining representation in South Korea’s Exchange-Traded Fund (ETF) market. (Image courtesy of Yonhap)
M. H. Lee (mhlee@koreabizwire.com)
