Samsung Group heir Jay Y. Lee has been sentenced to two years and six months of prison over bribery charges, bringing a striking end to 4 years-long graft trial that had inflamed resentment in the country over the peaceful relationships between government and business.
The 52-year-old was convicted of bribing an associate of former President Park Geun-hye and jailed for five years in 2017, which played a huge role in his downfall. He denied the charges after which the sentence was reduced and suspended on appeal. He was then released after a one year sentence. However, in August last year, the South Korean Supreme Court reversed the appeals court, ruling that it was too lenient, and ordered the case to be retried.
In the trial’s final hearing, Lee made a lengthy apology and promised to make a “new Samsung,” and “fix what the court has pointed out as the harms of chaebol [family-owned conglomerate]”. Under South Korean law, only a jail term of three years or fewer can be suspended. For longer sentences, the person must serve out the term barring a presidential pardon. An attorney for Lee called the decision “regrettable”.
After Chairman Kun-Hee Lee met his demise last year, it was being expected that his son Jay Y. Lee will assume the role of his father and lead the South Korean tech giant. However, with this new decision, that seems impossible.
The vacuum atop the world’s largest producer of memory chips, smartphones and consumer appliances comes as the pandemic is exacerbating rising uncertainty around the US-Chinese relationship and intensifying competition. While Samsung’s day-to-day business is controlled by an army of managers, Lee’s absence may stall or complicate huge investments or strategic longer-term moves.
Bae Sang-Kun, the executive director of the federation of Korean Industries in reaction to the conviction said, “We deeply regret (the court’s) decision as Vice Chairman Jay Y. Lee has been helping sustain the South Korean economy with his bold investment and job creation amid the economic crisis caused by the coronavirus pandemic.”
Separately, Lee faces another case related to a controversial merger between Samsung C&T and Cheil Industries in 2015, centered on allegations ranging from violation of capital markets law to a breach of duty. Lee will have to attend hearings in that case from jail.