Samsung's boss escapes prison, but can he escape the market slump?

Samsung's long-running legal battle over its chairman has finally come to an end. South Korea's Supreme Court has cleared Jay Y. Lee of all charges related to accounting fraud and stock manipulation, eliminating a cloud that has hovered over Samsung for nearly a decade.

The case centered on a controversial $8 billion merger in 2015 between Samsung C&T and Cheil Industries. Prosecutors argued that the deal was designed to secure Lee's succession and cement his control over the conglomerate, accusing him and other executives of manipulating stock prices and engaging in fraudulent accounting practices at the expense of minority shareholders. These were not minor charges by any means.

Lee, who assumed leadership after his father suffered a heart attack in 2014, consistently rejected the allegations, saying the merger followed normal management practices.

The path to this ruling was long and turbulent. In late 2024, prosecutors demanded a five-year prison sentence for Lee, even after a Seoul court had previously cleared him of wrongdoing earlier that year. His history of legal troubles only added to the controversy, particularly a bribery conviction linked to former President Park Geun-hye, which led to 18 months behind bars before his release in 2021 and subsequent pardon in 2022.



By February 2025, Lee secured an important victory when an appeals court upheld his acquittal on fraud and stock manipulation charges. However, uncertainty persisted as prosecutors retained the right to escalate the case to the Supreme Court. That uncertainty is now gone. The country's highest court has upheld the earlier ruling, permanently closing the chapter on these accusations and giving Samsung breathing room to focus on its business priorities.

Industry analysts have emphasized that this decision removes a major obstacle for Samsung's leadership. They believe that eliminating legal uncertainty could encourage more decisive management and allow the company to concentrate on long-term strategies rather than short-term survival. Investors have already reacted positively, boosting Samsung shares as confidence returns to the market.

The road ahead is not a walk in the park

Despite the legal victory, the road ahead for Lee is far from smooth. Samsung recently reported a worse-than-expected 56% plunge in second-quarter operating profit, with sluggish AI chip sales deepening investor concerns. Corporate analysts note that Lee now faces the dual challenge of reinforcing Samsung's dominance in its core businesses while identifying new engines for growth.

So, Lee must turn his attention to restoring Samsung's momentum in the global tech race. While the Samsung ecosystem is stronger than ever, as my colleague Victor argues, it would be nice if Sammy catches up with rivals on the battery front.

Also, how about a slightly cheaper Galaxy Z Fold next time around? Eh, who am I kidding – the $2,000 price tag of the recently released Galaxy Z Fold 7 will probably be topped by the next Sammy foldable flagship.

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