Lee Jae Yong: Samsung heir gets prison term for bribery scandal
Jan 20 2021
Samsung Electronics Vice Chairman Lee Jae-yong arrives at the Seoul High Court in Seoul, South Korea, Jan. 18, 2021.
Industry observers said Lee's absence is likely to delay or stop Samsung's key business decisions, such as merger and acquisition (M&A) deals, as foreign rivals prepare for new opportunities in the post-pandemic era. Park herself is spending some two decades in prison in connection with the case. Lee was sent back to prison Monday after a court sentenced him to two and a half years over his involvement in a 2016 corruption scandal that spurred massive street protests and ousted Korea's president.
With a suspended prison sentence, he was released from jail in February 2018 after serving about one year behind bars, but the Supreme Court returned the case to the high court calling for harsh punishment. In South Korea, the Supreme Court can either endorse a lower court's ruling on a case or send it back for a retrial.
The Seoul High Court gave Lee, vice chairman of Samsung Electronics Co, the prison term for bribing Park and her longtime friend, Choi Soon-sil, to win government support for a smooth father-to-son transfer of managerial power at Samsung, the country's top conglomerate.
The elder Lee died past year, leading to speculation that there would be a shake-up at Samsung as his heirs could be forced into asset sales or dividend payments to cover a massive inheritance tax bill.
Shares of Samsung Electronics fell 3.4% after the sentencing. His father Lee Kun-hee, the company's chairman, died past year after suffering a heart attack in 2014. In February 2017, the independent counsel concluded that Lee had offered bribes worth 29.8 billion won and promised to offer another 21.3 billion won to Park and Choi.
Under South Korean law, only a jail term of three years or fewer can be suspended.
Two more former Samsung executives were imprisoned for two and a half years on similar charges.
"The nature of this case is the former president's abuse of power violating corporate freedom and property rights". Throughout the retrial, Lee asked for leniency, citing his conglomerate's establishment of a compliance committee to counter any possible illegal management activities in the future and his vow to prevent a fourth-generation management of the group by his children.
One Lee lawyer, Lee In-Jae, described the ruling as "regrettable".
Needless to say, Mr Lee is unlikely to be held until it's time for the Galaxy S40 but he could very well serve quite a long sentence to set an example nonetheless, so hopefully Samsung has contigency plans for whatever is in its pipeline for that period. The justice department also saw that vice president Lee was recognized for other embezzlement charges in bribery.