A South Korean court has sentenced Samsung Electronics vice chairman Jay . Lee to two-and-a-half years in prison, which will have major ramifications for his leadership of the tech giant as well as Korea’s views toward big business.
Lee will be sidelined from major decision making at Samsung and from overseeing the process of inheritance from his father, Lee Kun-hee, who died in October, crucial to keeping control of the business.
Lee Kun-hee was the third son of Samsung founder Lee Byung-chul, and was company chairman for more than 30 years.
Jay Y. Lee, 52, was convicted of bribing an associate of former South Korean President Park Geun-hye and jailed for five years in 2017.
The Seoul High Court sentenced Samsung’s top leader, Lee Jae-yong, to two and a half years in prison for bribing South Korea’s former president, Park Geun-hye.https://t.co/O5TVye2AFZ
— The New York Times (@nytimes) January 18, 2021
He denied wrongdoing, the sentence was reduced and suspended on appeal, and he was released after serving a year.
The Supreme Court then sent the case back to the Seoul High Court, which issued Monday’s ruling.
Jay Y. Lee was found guilty of bribery, embezzlement and concealment of criminal proceeds worth about 8.6 billion won ($10.2 million).
The court said the independent compliance committee Samsung set up early last year has yet to become fully effective.
“(Lee) has shown willingness for management with newly stronger compliance, as he as vowed to create a transparent company,” Presiding Judge Jeong Jun-yeong said.
“Despite some shortcomings … I hope that over time, it will be evaluated as a milestone in the history of Korean companies as a start of compliance ethics for a greater leap forward.”
Lee, dressed in a dark coat and silver tie and standing to hear the sentencing, sat down after it was read.
“The nature of this case is the former president’s abuse of power violating corporate freedom and property rights,” Lee’s lawyer, Lee In-jae, said.
“Given that nature, the court’s decision is regrettable.”
With Lee returning to prison, the year he already served in detention is expected to count toward the sentence – leaving 18 months to be served.
Monday’s sentencing can be appealed to the Supreme Court within seven days, the judge said, but legal experts said that because the Supreme Court has already ruled on it once, chances are lower that its legal interpretation will change.
Shares in Samsung Electronics dropped as much as 4 per cent after the ruling, while shares in affiliates such as Samsung C&T, Samsung Life Insurance and Samsung SDI also fell sharply.