It’s back to jail for Samsung’s leader, Lee Jae-yong (aka Jay Y. Lee). Lee has been embroiled in a legal battle for his role in “Choigate,” a major 2016 South Korean political scandal that led to South Korean President Park Geun-hye being impeached and removed from office. The scandal is named for the president’s top aid, Choi Soon-sil, a member of a shamanistic cult that was found to be masterminding South Korean government policy via her influence over the president. It’s a long story, but Choi was sentenced to 20 years in prison for influence peddling, and Park was sentenced to 25 years.
Samsung’s part in this mess involves accusations that Lee bribed Choi for favorable rulings related to the merger of two Samsung affiliates. In 2017, Lee was sentenced to five years in jail after being found guilty of bribery, embezzlement, capital flight, and perjury charges. Six months after his sentencing, an appeals court cut Lee’s sentence in half and suspended the charges for bribery and embezzlement. Lee was released from prison while the appeals process continued. The case wound its way all the way up to the South Korean Supreme Court, which, in 2019, ordered a retrial.
Today’s ruling sentences Lee to 30 months in prison, and after having already served one year, Samsung’s leader should be spending the next year and a half behind bars.
“Samsung is above the law”
Lee’s initial conviction and the constant whittling down of punishment has been par for the course for Samsung executives accused of crimes in South Korea. Samsung is so large that it makes up anywhere from 10 to 20 percent of South Korea’s GDP, depending on the year, so there is a fear of what damaging the company would do to South Korea’s economy. Lee’s recently deceased father and the chairman of Samsung Group, Lee Kun-hee, was convicted of bribery in 1996 and of tax evasion in 2009 but was never arrested nor served jail time. Later, presidential pardons wiped out his criminal record. As one National Assembly member put it when Lee’s sentence was reduced in 2018, “We confirmed once again that Samsung is above the law and the court.”
Bloomberg’s report on the sentencing gives us an idea of how the “Pro-Samsung” faction of South Korea feels about the court ruling. The report quotes Shin Se-don, an emeritus professor of economics at Sookmyung Women’s University: “Lee might be able to manage the company from the jail, but there will be some setback. The jailing of Lee will give an emotional shock to the people. Samsung is a backbone of our economy and people will be upset about the result.”
Samsung Group is currently undergoing a major transition after the death of Lee’s father, Samsung Chairman Lee Kun-hee, in October. Lee Jae-yong has been the de facto leader of Samsung for years now, following Lee Kun-hee’s hospitalization in 2014 after a heart attack. Now Lee Jae-yong will have to properly ascend from “vice-chairman” to official Samsung chairman and deal with the financial challenge of paying South Korea’s 50 percent estate tax on the Samsung empire. Bloomberg reports that the transition is “likely” to be delayed until Lee gets out of prison.