Samsung’s Lee receives 30-month jail time period in bribery trial By Reuters
© Reuters. Jay Y. Lee, vice chairman of Samsung Electronics, speaks during a press conference at a corporate office building in Seoul
From Joyce Lee
SEOUL (Reuters) – A South Korean court sentenced Samsung Electronics (OTC 🙂 vice chairman Jay Y. Lee to two and a half years in prison on Monday, which could delay the group’s restructuring after Lee’s father passed away in October.
The ruling also cements a major change in South Korea’s view of wrongdoing by the owners of the country’s powerful conglomerates, or chaebol, which spearheaded the country’s economic rise after the Korean War because of its easy-going relationships with politicians.
Lee, the most powerful businessman in the country at 52, had spent a year in jail for bribing an employee of former President Park Geun-hye when an appeals court suspended him in 2018. a year later the Supreme Court ordered him to try again. His prison term counts towards his final prison term.
The Seoul Supreme Court conviction on Monday can be appealed to the Supreme Court within seven days. However, legal experts said that since the Supreme Court had already ruled this once, there was little chance that its legal interpretation would change.
The Seoul Supreme Court found Lee guilty of bribery, embezzlement and concealment of the proceeds of crime valued at approximately 8.6 billion won ($ 7.8 million), and said the independent compliance committee established Samsung earlier last year (KS 🙂 has not yet fully entered into force.
“(Lee) has shown his willingness to manage with newly strengthened compliance as he vowed to create a transparent company,” said Presiding Judge Jeong Jun-yeong.
“Despite some shortcomings … I hope that over time this will be seen as a milestone in the history of Korean companies as the start of compliance and ethics,” he said.
Lee, clad in a dark cloak and silver tie, stood to hear the condemnation and sat down after it was read. He did not comment when the judge gave him a chance.
During his final testimony in court in December, Lee said he wanted to “build a new Samsung”.
“This case is about the former president’s abuse of power that violates corporate freedom and property rights … The court’s decision is unfortunate,” Lee’s attorney Lee In-jae told reporters.
Lee is being excluded from major decisions at Samsung Electronics for the time being as it seeks to outpace the competition. He will also not be able to directly oversee his father’s inheritance process, which is vital to keeping control of Samsung.
Analysts agreed that day-to-day business would not be affected, but large-scale decisions, the results of which often take years to become apparent, such as: B. Mergers and Acquisitions and Major Personnel Changes.
“(Lee’s) absence will not disturb the current management of Samsung … Unlike his father’s day, Samsung has systematically managed decisions and distributed them to the CEOs of each company,” said Chung Sun-sup, chief executive of research at Chaebul .com.
“But aside from undermining its global image, long-term strategies such as current unplanned investment in the future and restructuring could stop,” he added.
Samsung subsidiary shares fell sharply after the ruling, with Samsung Electronics shares falling 3.4% in their worst daily decline in five months, while Samsung C&T shares fell 6.8%.
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Monday’s decision showed that the indulgence that South Korean business leaders have traditionally shown in the past can no longer be expected.
Lee is expected to return to the prison where he served his previous sentence on Monday.
Business groups have expressed concern about the potential impact of Lee’s ruling.
“A lack of long-term leadership can lead to delayed entry into new companies and quick decisions, leaving them behind in global competition,” said Bae Sang-kun, executive director of the Federation of Korean Industries lobby group.
($ 1 = 1,104,1400 won)