DAEGU (Yonhap News) ― A high court on Wednesday upheld a lower court ruling, ordering Samsung Electronics chairman Lee Kun-hee to compensate for losses he inflicted on Samsung Group’s textile unit while apparently carrying out favors for his son.
A lower court in February ruled in favor of three minority shareholders of Cheil Industries Inc., Samsung Group’s textile arm, and ordered Lee to pay 13 billion won ($11.45 million) in compensation.
In a lawsuit, the three claimed the chairman in 1996 instructed the textile company to refrain from buying convertible bonds of Samsung Group’s de facto holding company, Samsung Everland Inc., so he could transfer the group’s control to his son.
Lee Jay-yong, the chairman’s only son, won control of Everland after he bought the closely held company’s convertible bonds in 1996.
“The court does not accept chairman Lee’s claim that he had not given instructions to Cheil Industries,” Judge Hong Seung-myeon of the Daegu High Court said in the ruling.
In May 2009, the Supreme Court upheld a not-guilty verdict for Lee on charges of illegally transferring management control by selling the convertible bonds to his son, Jae-yong, at below-market prices.
