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Samsung leader Lee Jae-yong (aka Jay Y. Lee) is back in prison. Lee is involved in a legal battle for his role in “Choigate”, a major South Korean political scandal in 2016 that prompted South Korean President Park Geun-hye to be removed and removed from office. The scandal takes its name from the president’s main aid, Choi Soon-sil, a member of a shamanistic cult that was considered to be the policy mentor of the South Korean government through its influence on 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 of this mess involves accusations that Lee bribed Choi to obtain favorable decisions related to the merger of two Samsung affiliates. In 2017, Lee was sentenced to five years in prison after being found guilty of bribery, embezzlement, capital flight and charges of perjury. Six months after his sentence, an appeals court cut Lee’s sentence in half and suspended the bribery and embezzlement charges. Lee was released from prison while the appeals process continued. The case came to South Korea’s Supreme Court, which in 2019 ordered a retrial.
Today’s ruling condemns Lee to 30 months in prison, and after serving a year, Samsung’s leader is expected to spend the next year and a half behind bars.
“Samsung is above the law”
Lee’s initial conviction and steady reduction in punishment were common for Samsung executives accused of crimes in South Korea. Samsung is so big that it represents 10 to 20 percent of South Korea’s GDP, depending on year, then there is a fear that damage the company would cause to the South Korean economy. Lee’s recently deceased father and Samsung Group president Lee Kun-hee was convicted of bribery in 1996 and tax evasion in 2009, but he was never arrested or served a prison sentence. Later, presidential pardons erased his criminal record. As a member of the National Assembly said when Lee’s sentence was reduced in 2018, “We confirm once again that Samsung is above the law and the court.”
Bloomberg’s report on the sentence gives us an idea of how South Korea’s “Pro-Samsung” faction feels about the court’s decision. The report quotes Shin Se-don, an emeritus professor of economics at Sookmyung Women’s University: “Lee may be able to run the company in prison, but there will be some setbacks. Lee’s arrest will cause an emotional shock to people. Samsung is the backbone of our economy and people will be upset about the outcome. “
The Samsung Group is currently undergoing a major transition following the death of Lee’s father, Samsung President Lee Kun-hee, in October. Lee Jae-yong has been Samsung’s de facto leader for years after Lee Kun-hee’s hospitalization in 2014 after a heart attack. Now Lee Jae-yong will have to properly rise from “vice president” to Samsung’s official president and deal with the financial challenge of paying South Korea’s 50% property tax on the Samsung empire. Bloomberg reports that the transition is “likely” to be delayed until Lee gets out of prison.