Samsung’s Jay Y. Lee cleared in 2015 merger case; here’s what the trial was about and why it matters

South Korea’s Supreme Court upheld a not-guilty verdict for Samsung Electronics Chairman Jay Y. Lee on Thursday, permanently ending a years-long legal battle tied to a controversial 2015 merger. The top court backed two lower court rulings that had cleared Lee of stock manipulation, accounting fraud, and other charges in the $8 billion deal involving Samsung C&T and Cheil Industries.

The ruling removes a major legal overhang for Lee, who has led Samsung since his father, Lee Kun-hee, fell into a coma following a heart attack in 2014. It also comes at a crucial time, as Samsung intensifies efforts to compete in the global AI chip race.

Samsung and business lobby groups welcomed the verdict, calling it a stabilising development amid growing competition in high-tech sectors. Samsung’s lawyers said the ruling confirmed the merger was legal.

What was the 2015 merger case? What were the charges against Lee?

At the centre of the case was the merger between Samsung C&T and Cheil Industries in 2015, seen as a key step in consolidating Jay Y. Lee’s control over the Samsung group. The National Pension Service, a key shareholder, backed the merger despite opposition from international investors like Elliott Management.

Critics argued the deal undervalued Samsung C&T, harming minority shareholders, and was structured to benefit Lee's succession. In 2023, South Korea was ordered to pay $108.5 million to Elliott over its role in the deal’s approval.

Prosecutors alleged the merger and related accounting practices were aimed at strengthening Lee’s grip on the group. Key charges against him included stock price manipulation, accounting fraud, breach of trust, and violations of capital markets law. A key allegation was that Samsung BioLogics, an affiliate of Cheil, had overstated its assets to make the merger more favourable.

History of the case so far

In 2014, Lee assumed de facto control of Samsung after his father’s heart attack. The following year, Samsung C&T and Cheil Industries merged. In 2020, Lee and 13 others were indicted on 19 charges, later increased to 23. However, in 2022, Lee was pardoned by President Yoon Suk-yeol after serving 18 months in a separate bribery case. In 2024, a lower court acquitted Lee of all charges. However, prosecutors appealed. Earlier this year in February, the Seoul High Court again upheld the acquittal—only six months later, the Supreme Court upheld the decision, dismissing the prosecution’s final appeal.

With the legal cloud lifted, Lee now faces the challenge of steering Samsung through an era of technological disruption while finding new growth engines for the company.