The Seoul Central District Court found Lee guilty of not paying about 47 billion won ($46 million) in taxes and fined him 110 billion won ($109 million).

But the court did not send Lee to prison, saying he just kept the assets in question after inheriting them under borrowed names from his late father — Samsung's founder — and that he did not actively seek to evade the taxes.

Prosecutors had demanded a seven-year sentence and 350 billion won ($347 million) in fines against Lee.

"The extent of his crime is not serious enough to sentence him to prison," Judge Min Byung-hun said. He sentenced Lee to three years in prison and then suspended the sentence for five years, meaning Lee will not go to jail as long as he avoid further legal woes.

South Korean judges have repeatedly shown leniency in high-profile corporate cases, refusing to send tycoons to prison for fears of the effects it would have on the country's economy.