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Samsung chief, cleared after nine-year legal battle, eyes new growth

Published: 18 Jul. 2025, 09:23

Samsung Electronics Executive Chairman Lee Jae-yong arrives at the 2025 Ho-Am Prize award ceremony held at the Shilla Hotel in Jung District, Seoul, on May 30. [YONHAP]

The Supreme Court on Thursday upheld a lower court’s not guilty verdict for Samsung Electronics Executive Chairman Lee Jae-yong in a long-running case involving the controversial 2015 merger between Samsung C&T and Cheil Industries, as well as accounting practices at Samsung Biologics. The ruling, five years after Lee was indicted, marks the end of a legal ordeal that began in the wake of the 2016 presidential influence-peddling scandal.

The case has come to symbolize the pitfalls of Korea’s prosecutorial system, which critics say targets individuals rather than evidence. Prosecutors launched broad investigations led by Lee Bok-hyun — then a senior prosecutor at the Seoul Central District Prosecutors’ Office and later head of the Financial Supervisory Service — raiding 53 Samsung affiliates and questioning more than 300 employees. Yoon Suk Yeol, the former president, was serving as prosecutor general at the time. Former Justice Minister Han Dong-hoon was also part of the investigative command.

Despite a recommendation from an external advisory panel in 2020 that the case not proceed, prosecutors filed 19 charges against Lee. Lower courts dismissed all charges, and although public sentiment called for the prosecution to drop its appeal, it proceeded to the Supreme Court, where it was ultimately defeated.

The legal saga took a toll on Samsung. During the nine years of uncertainty, the company lagged in next-generation semiconductor technologies, including high bandwidth memory, and saw widening losses in its foundry business. While Samsung’s market capitalization rose 49 percent over the period, competitors surged ahead — Nvidia’s market cap soared by more than 7,100 percent, and Taiwan’s TSMC grew 746 percent. Industry shifts played a role, but the leadership vacuum created by ongoing legal battles also contributed to the company’s stagnation.

Kolon Group Honorary Chairman Lee Woong-yeol arrives at the Seoul Central District Court in Seocho District on November 29, 2024, for the verdict hearing of his first trial. He was indicted on charges related to data manipulation involving Invossa-K, a gene therapy drug for osteoarthritis. [YONHAP]

Samsung is not alone. Other conglomerates, including Kolon Group, have also struggled under prosecutorial scrutiny. Kolon executives, including Honorary Chairman Lee Woong-yeol, were acquitted in November 2024 after being indicted for allegedly falsifying data to secure approval for a gene therapy product. That trial lasted over four years. While Korean authorities pursued criminal charges, the U.S. Food and Drug Administration allowed clinical trials to resume after reviewing scientific data. With new business regulations like a revised Commercial Act and the so-called Yellow Envelope Bill on the horizon, legal risks facing Korean companies are likely to grow. The line between regulatory oversight and overreach must be carefully managed.

Now cleared of legal entanglements, Samsung must use this moment to move forward. Following his acquittal in the appeals court in March, Lee told employees to adopt a “make-or-break mindset.” The company must pursue bold mergers, investments and restructuring to build future growth engines. With legal distractions behind him, Lee now has a chance to prove Samsung’s capacity for renewed innovation.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.