300 People Investigated, 53 Locations Raided, Ultimately Acquitted... Prosecution's 8-Year Battle Against Samsung Ends in Defeat (Comprehensive)

Second Trial Also Finds Not Guilty of Unfair Merger and Accounting Fraud
All 19 Charges Acquitted, Same Verdict in Both First and Second Trials
Investigation Led by Pro-Yoon Seok-yeol Prosecutors Lee Bokhyun and Han Donghoon
Only Supreme Court Review Remains After Completion of Fact-Finding Trials

The Seoul High Court Criminal Division 13 (Presiding Judge Baek Gang-jin) acquitted Samsung Electronics Chairman Lee Jae-yong of charges related to unfair mergers and accounting fraud in the appeal trial. This resolves the judicial risk for Chairman Lee that had been ongoing for eight years since the first trial began on March 9, 2017, regarding the 'Blue House Samsung C&T merger interference suspicion.' From the prosecution's perspective, despite conducting an intensive investigation involving questioning 300 people and raiding more than 53 locations, the trial ended in a complete defeat in the second trial with all 19 charges acquitted.

The investigation into Chairman Lee began in November 2018 when the Securities and Futures Commission under the Financial Services Commission filed a complaint against Kim Tae-han, CEO of Samsung Biologics (Samba), for accounting fraud. The case was assigned to the Special 2nd Division of the Seoul Central District Prosecutors' Office. It took 21 months until the investigation results were announced in September 2020. According to Chairman Lee's legal team, during this period, approximately 300 people were questioned about 860 times, and 53 locations were raided.

The investigation leaders were prosecutors known as the so-called 'Yoon Seok-yeol line,' who were pro-Yoon Seok-yeol. During Yoon Seok-yeol's tenure as Prosecutor General in 2020, Lee Bok-hyun, then head prosecutor of the Economic Crime Division at the Seoul Central District Prosecutors' Office (now head of the Financial Supervisory Service), led the investigation and prosecution of this case. The investigation command line also included Han Dong-hoon, then the 3rd Deputy Prosecutor of the Seoul Central District Prosecutors' Office and former emergency committee chairman of the People Power Party.

The locations raided during the investigation included the headquarters and offices of 10 Samsung affiliates, such as Samba, Samsung Bioepis (a subsidiary of Samba), Samsung C&T, and the Business Support Task Force (TF), the successor to Samsung Electronics' Future Strategy Office. Including 13 residences of executives and employees, the total reached 53 locations. The prosecution conducted 10 raids on 10 affiliates including Samsung Electronics and 13 raids on residences of executives and employees, summoning over 300 people for questioning. It is known that the digital data seized and analyzed from Samsung's servers and PCs amounted to 22.7 million items (approximately 24TB).

In their final statement on November 25 last year, the prosecution argued, "The defendants abused their authority and exploited information asymmetry for Lee Jae-yong's personal gain," and pointed out, "What the defendants damaged are constitutional values that form the foundation of our economic justice and capital market." They further claimed, "The ruling in this case will serve as a benchmark for future corporate restructuring and accounting treatment directions."

Samsung rebutted the prosecution's claims, stating that the decisions were reasonable business judgments. In his final statement at the sentencing hearing, Chairman Lee explained the reason for the merger between Samsung C&T and Cheil Industries. He said, "Upon being informed of the merger promotion between Cheil Industries and Samsung C&T, I believed it would clearly benefit the futures of both companies," and added, "There was absolutely no intention to harm shareholders or deceive investors for my personal gain."

However, the court ruled in favor of Chairman Lee. The court stated, "Criminal responsibility cannot be recognized based on speculation, scenarios, or assumptions," and declared, "There is no merit to the prosecution's grounds for appeal," acquitting him of all 19 charges.