Prosecution appeals court acquittal of Samsung chief Lee

Prosecutors on Thursday appealed a recent court acquittal of Samsung Electronics Co. Chairman Lee Jae-yong in a controversial Samsung affiliate merger case, sources said.

On Monday, the Seoul Central District Court delivered a not-guilty sentence for Lee, who was charged over alleged engagement in market irregularities over the course of the controversial merger of two Samsung affiliates, Cheil Industries Inc. and Samsung C&T Corp., in 2015.

In response, the Seoul Central District Prosecutors Office on Thursday filed an appeal against the ruling, claiming the merger was aimed at solidifying Lee’s managerial control of the firm at a lower cost, according to judicial sources.

The prosecution had demanded a five-year prison sentence for the chief of South Korea’s largest conglomerate.

The merger was seen as crucial to Lee’s succession as the heir of the family-controlled firm, as his father, Lee Kun-hee, had suffered a heart attack the previous year.

Lee is currently on an overseas business trip to inspect Samsung’s operations in the Middle East and Southeast Asia.

Following the appeal, business community members have raised concerns over the prolonged legal risk facing the top Samsung executive, especially at a time when big tech companies need to nimbly adapt to the emerging trends involving artificial intelligence and the restructuring of global supply chains.

Some observers have pointed out that the appellate case could last over a year, which could add constraints on business activities of Samsung for the time being.

Hong Ki-yong, a business professor at Incheon National University, said, “It is not favorable for both the nation and Samsung itself in the long term that the leader of the company, responsible for cutting-edge technologies that determine the country’s competitiveness, continues to bear significant legal risks.”