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SEOUL: The de facto head of South Korea’s Samsung business empire was convicted on Monday (January 18) of a major corruption scandal and jailed for two and a half years, in a ruling that deprives the tech giant of its main decision. maker.
Lee Jae-yong, vice president of Samsung Electronics, the world’s largest smartphone and memory chip maker, was convicted of bribery and embezzlement in connection with the scandal that ousted South Korean President Park Geun-hye.
Lee “actively provided bribes and implicitly asked the president to use his power to help his succession smoothly” at the helm of the expanding conglomerate, the Seoul Central District Court said in its verdict.
“It is very unfortunate that Samsung, the nation’s leading company and proud global innovator, is repeatedly involved in crime every time there is a change in political power,” the court said.
He jailed him for two and a half years, concluding a new trial that was the last step in a long-running legal process that has been pending from Samsung for years.
Lee, who had previously entered court grim-faced and wearing a face mask, without answering journalists’ questions, was immediately detained.
Indeed, he has been at the helm of the multifaceted Samsung group for several years after his father was bedridden with a heart attack and finally died in October.
Samsung is by far the largest of the family-controlled conglomerates, or chaebols, that dominate business in South Korea, the world’s twelfth-largest economy.
Its total turnover is equivalent to a fifth of the national gross domestic product and is crucial for the economic health of South Korea.
Its rise has been driven by a willingness to invest billions in strategic bets on key technologies.
But experts say the ruling will create a leadership vacuum that could hamper his decision-making about future large-scale investments.
“It is really a great blow and a great crisis for Samsung,” said Kim Dae-jong, a business professor at Sejong University.
Public apology
The case centers on the millions of dollars that the Samsung group paid to Park’s secret confidant, Choi Soon-sil, allegedly for government favors that include ensuring a smooth transition for Lee to succeed his then ailing father.
The scandal highlighted murky connections between big business and politics in South Korea, with the ousted president and his friend accused of taking bribes from corporate bigwigs in exchange for preferential treatment.
Lee was first jailed for five years in 2017, after Park’s impeachment.
An appeals court dismissed most of his bribery convictions and imposed a suspended sentence the following year, but the Supreme Court later ordered the 52-year-old man to face a new trial.
In May, Lee made a rare public apology, bowing to cameras with flashes for company misconduct, including the company’s controversial plan for him to rise to leadership.
His own children, he promised, would not succeed him in senior management positions at the company.
Both Lee’s father, Lee Kun-hee, and grandfather, Samsung founder Lee Byung-chul, ran into trouble with the law, but never served time behind bars.
Earlier this month, Samsung Electronics, the group’s flagship subsidiary, posted a more than 25% increase in fourth-quarter operating profit, citing pandemic-induced work-from-home benefits that fueled demand for devices powered by your chips.
Analysts forecast a stable outlook for the company in 2021, driven by continued demand for memory chips.
