Due to COVID-19, Video and Phone Calls Will Not Be Allowed: Managing the Company from Behind Bars as in His First Time in Prison Not Likely

[경향신문]

Lee Jae-yong, vice chairman of Samsung Electronics attends a sentencing hearing on the case of the abuse of state authority at the Seoul High Court in Seocho-dong, Seoul on the afternoon of January 18. Kim Ki-nam

Lee Jae-yong, vice chairman of Samsung, who was arrested for his involvement in the abuse of state authority after three years, will be restricted in visitations at the detention center due to the spread of COVID-19. This is also expected to significantly interfere with his running the company from prison.

According to correctional authorities on January 19, Lee underwent a rapid antigen test for COVID-19 immediately after he arrived at Seoul Detention Center, following the previous day’s court sentence of 2 years and six months in prison for his involvement in the abuse of state authority. Test results came back negative. Lee was then put in quarantine for four weeks in a solitary room according to the guidelines for new inmates at the detention center.

Lee met with his lawyers for an hour and a half this day. Attorney Lee In-jae of the law firm Bae, Kim & Lee LLC (BKL) said, “Lee Jae-yong remains firm and is doing well.” He also said, “We are currently in the final stages of discussing whether or not to appeal the court decision,” after the meeting.

If the spread of COVID-19 is not contained, Lee is expected to face restrictions in his communication with the outside world, including the executives of his company, other than his lawyers. Seoul Detention Center has implemented a strong ban on visitations after the distancing level inside correctional facilities was raised to level 3. General visitations for inmates have been banned, including family as well as company executives. Video calls and phone calls are also impossible in the current level, because of the risk of contagion when detention center employees take the inmates to and from the necessary facilities. Visits by attorneys are also restricted with a partition placed between the parties. Therefore, if Lee wants to communicate with the executives of his company, he must do so indirectly through his lawyers or do so via writing.

In 2017, when Lee was first imprisoned for his involvement in the abuse of state authority, he reportedly received reports and was involved in some decision making from inside the prison. A typical example is the disbandment of the Samsung Group’s future strategy office that year and the decision to invest 30 trillion won in the semiconductor production line in Pyeongtaek. But this time, due to COVID-19, it is unlikely for Lee to receive a proper report on the business.

As for Lee, he also has to organize the property inherited from the chairman of the group, Lee Kun-hee, and come up with the financial resources to pay an immense inheritance tax. The artworks and real estate owned by the late chairman is currently being appraised by an outside party for Lee to pay the inheritance tax, but Lee will be restricted in communications when deciding on what assets to sell to pay his taxes.

Samsung Electronics is quietly preparing a response to the absence of Lee, since it is difficult for the executives to gather in one place due to COVID-19. Even if they are to hold a meeting, they will have to minimize the number of participants or conduct a videoconference, so even the follow-up measures are expected to be quite different from when Lee was first imprisoned in 2017.