Samsung's de facto head given five-year prison sentence

Lim Chang-won  Reporter Posted : 2017-08-25 16:20 Updated : 2017-08-25 16:44
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[Photo by Namgung Jin-ung = timeid@ajunews.com]


The de facto leader of South Korea's largest conglomerate, Samsung, was sentenced to five years in prison after a court acknowledged bribery, embezzlement and other charges stemming from a corruption scandal involving an ousted ex-president.

The Seoul Central District Court ruled that Samsung Electronics Vice Chairman Jay Y. Lee embezzled company funds to bribe the ex-president's crony, Choi Soopn-sil, who has been at the center of the scandal and indicted for coercing business leaders to donate money to her business entities.

Lee was found guilty of providing 7.2 billion won (6.4 million US dollars) in bribes to bankroll the equestrian training of Choi's daughter in Germany at the request of former president Park Geun-hye in return form outright favors.

Lee was also convicted of perjury and hiding assets overseas. "The nature of this case is the collusion between political power and capital power," the court said in a statement, adding people were seriously let down by collusive ties between a national leader and conglomerates.

Two Samsung executives, Choi Gee-sung and Chang Choong-ki, were sentenced to five years in prison each while two others, Park Sang-jin and Hwang Sung-soo, received suspended jail sentences. 

The court concluded that Lee and other Samsung executives have "passively" colluded with Park to ensure the smooth transfer of group leadership. Lee's lawyers said they would appeal.

The lawyers have argued there was no need for Lee to use bribes for the transfer of power from his bed-ridden father, Lee Kun-hee, because the son's leadership was already strong before a corruption scandal surfaced in October last year.

The scandal fanned public sentiment against corporate donations, which have long been a controversial issue in South Korea due to concern about collusive ties between businessmen and politicians.

Friday's verdict would affect Park's case because the disgraced former president is on trial on multiple charges including bribery, abuse of authority, coercion and leaking government secrets. She was accused of abusing her status and power to solicit bribes from top conglomerates, although she claimed businessmen have voluntarily donated money.

Top officials of the family-run conglomerates or "chaebol" have made regular court appearances on various charges. Some have received heavy jail terms, only for them to be pardoned or released on early parole.
 
Samsung has already put the break on the idea of revamping the structure of corporate governance to introduce a system controlled by a holding company. However, Samsung without Lee in control tower posted a record second-quarter profit of 11.53 trillion won.

Since Lee's arrest in February, Samsung has thrown all its efforts into developing the new phone as redemption for its combustible Note 7 fiasco that has damaged its brand value and reliability. The tech giant has successfully released its latest smartphones Galaxy S8 series in April and Galaxy Note 8 in August. Both phones have received high praises at home and abroad for their performances and quality.