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By Joyce Lee and Hyunjoo Jin
SEOUL (Reuters) - Samsung Electronics Chairman Jay Y. Lee was found not guilty of accounting fraud and stock manipulation by a Seoul appeals court on Monday, in a ruling that could remove long-running legal risks that he has faced from criminal cases.
The Seoul High Court upheld the lower court's ruling dismissing all the charges from a case involving a 2015 merger that prosecutors said was designed to cement Lee's control of the tech giant.
The legal battles have been a distraction for Lee, who faced growing questions about his ability to lead Samsung Electronics - the world's top memory chip and smartphone maker - as it grapples with growing competition and lacklustre stock prices.
"It took a long time. We hope with the latest ruling, the defendants would be able to focus on their work," Lee's lawyer Kim You-jin said after the ruling.
For nearly a decade, Lee has faced legal challenges, including those from the merger that paved the way for his succession after his father, Lee Kun-hee, had a heart attack in 2014 that left him in a coma.
A lower court last year cleared Lee of all charges related to the $8 billion merger in 2015 between two Samsung affiliates, Samsung C&T and Cheil Industries. Prosecutors later appealed to the Seoul High Court, seeking a five-year jail term, citing a separate ruling in August that said Samsung BioLogics, an affiliate of Cheil Industries, breached accounting standards by overstating its assets to justify the merger.
The judge said even as the BioLogics accounting practices involved "inappropriate acts" such as the manipulation of documents, the outcomes reflected financial realities and were based on rational reasons and processes.
The court dismissed prosecutors' claims that the merger caused financial losses to Samsung C&T shareholders. Lee did not answer questions from reporters when he was leaving court on Monday.
He has denied wrongdoing, saying in court last November, "I never intended to deceive or damage investors for personal gain".
It was not immediately clear whether the prosecution would appeal the decision to the Supreme Court.
Samsung shares closed down 2.7% following the ruling.
LENIENCY
A civic group condemned the court's decision because it argued it showed leniency to Lee, who was charged with tightening his grip over his company at the expense of the country's pension fund and other investors.
The People's Solidarity for Participatory Democracy said the court disregarded other court rulings related to the merger case.