Samsung heir Lee returns to prison upon sentenced 2 and 1/2 years jail term

[Photo by Lee Chung-woo]

Updated with court development

Jay Y. Lee, Samsung Electronics Co. Vice Chairman and de facto leader of South Korea’s biggest conglomerate Samsung Group, is put behind bars for the second time over a bribery charge connected to the impeached President Park Geun-hye, leaving a leadership vacuum in the nation’s most valuable company in a critical time during the surge in chip demand, digital migration and ongoing pandemic crisis.

The Seoul High Court on Monday sentenced Lee to two and a half year prison term by upholding bribery conviction associated with Park and her long-time confidant Choi Soon-sil in return for their backing in solidifying his grip on the nation’s top conglomerate. “It is hard to verify effectiveness of Samsung’s legal compliance monitoring committee, and it is inappropriate to reflect it to the verdict,” the court said.

The de facto leader of Samsung Group was jailed in 2017 after receiving a five-year jail term and released in the following year after an appeals court gave a suspended term of two and a half years.

The Supreme Court overturned the appeals court’s ruling in 2019 and ordered a retrial.

[Photo by Lee Chung-woo]

Samsung Group pleaded for leniency emphasizing its efforts to strengthen law-abiding management. It launched an internal legal compliance monitoring committee in February 2020. Lee made a public apology in May, vowing not to pass down management of Samsung to his children. He expressed his deep regret about his alleged wrongdoings and pledged to create a “new Samsung” in his final testimony in December.

Lee has come to de facto command over the country’s top conglomerate and company after his father and chairman Lee Kun-hee passed away in December.

Samsung Display Co. became the first Samsung affiliate last Thursday to sign a collective agreement after eight months since Lee declared the conglomerate would end its ‘no labor union’ policy.

Local business lobbying groups petitioned for merciful ruling citing the possible repercussion of the verdict on other companies working in partnership with Samsung affiliates and the country’s overall economy. But the Monday verdict crushed the hope of Samsung and other business leaders.

Samsung Electronics closed Monday down 3.75 percent to 84,700 won. Samsung C&T shares plunged 7.49 percent to finish at 142,000 won and Samsung Life Insurance tumbled 4.96 percent to 78,500 won.

[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]