Samsung personality Jay Y. Lee given five-year jail judgment for bribery

SEOUL (Reuters) – The billionaire conduct of South Korea’s Samsung Group, Jay Y. Lee, was condemned to 5 years in jail for temptation on Friday in a watershed for a country’s decades-long mercantile sequence dominated by powerful, family-run conglomerates.


After a six-month hearing over a liaison that brought down a afterwards president, Park Geun-hye, a probity ruled that Lee had paid bribes in expectation of favours from Park.

The probity also found Lee guilty of stealing resources abroad, piracy and perjury.

Lee, a 49-year-old successor to one of a world’s biggest corporate empires, has been hold given Feb on charges that he bribed Park to assistance secure control of a firm that owns Samsung Electronics, a world’s heading smartphone and chip maker, and has interests trimming from drugs and home appliances to word and hotels.

Lee, who emerged stony-faced from a Seoul courtroom in a dim suit, though though a tie, and holding a request envelope, was escorted by probity method officials behind to his apprehension centre.

“This box is a matter of Lee Jae-yong and Samsung Group executives, who had been usually scheming for Lee’s period … bribing a president,” Seoul Central District Court Judge Kim Jin-dong said, regulating Lee’s Korean name.

Kim pronounced that as a group’s successor apparent, Lee “stood to advantage a most” from any domestic favours for Samsung.

Lee denied wrongdoing, and one of his lawyers, Song Wu-cheol, pronounced he would appeal.

“The whole guilty outcome is unacceptable,” Song said, adding he was assured his client’s ignorance would be endorsed by a aloft court. The box is approaching to be appealed all a approach adult to a Supreme Court, approaching subsequent year.

The 5 year-sentence – one of a longest given to a South Korean business personality – is a landmark for South Korea, where a family-run conglomerates – or chaebols – have enlarged been worshiped for assisting renovate a once war-ravaged nation into a tellurian mercantile powerhouse.

But they have some-more recently been criticized for holding behind a economy and gloomy tiny businesses and start-ups.

Samsung, a pitch of a country’s arise from misery following a 1950-53 Korean War, has come to shorten a cosy and infrequently hurtful ties between politicians and a chaebols.

  • Downfall of ex-Samsung plan arch leaves ‘salarymen’ disillusioned
  • Supporters of dangling South Korea personality angry over jail for Samsung chief

“The statute is a branch indicate for chaebols,” pronounced Chang Sea-jin, a business highbrow during Korea Advanced Institute of Science and Technology. “In a past, chaebols weren’t fearful of laws given they were lenient. Now, Lee’s statute sets a fashion for despotic coercion of laws, and chaebols should be wary.”

Under South Korean law, sentences of some-more than 3 years can't be suspended.

LEADERSHIP VACUUM

The third-generation de facto conduct of a absolute Samsung Group, Lee has effectively destined operations given his father, Lee Kun-hee, was incapacitated by a heart conflict in 2014. Some investors worry a enlarged care opening could delayed decision-making during a group, that has some-more than 5 dozen associate companies and resources of 363.2 trillion won ($322.13 billion).

Its listed companies make adult about 30 percent of a marketplace value of South Korea’s KOSPI batch index.

Many tycoons, including Lee’s father, were convicted of crimes in a past, trimming from bribery, piracy and taxation evasion, usually to get presidential pardons, as both a supervision and a open feared going too tough on them would harm a economy.

But South Korea’s new magnanimous president, Moon Jae-in, who won a May election, has affianced to rein in a chaebols, commission minority shareholders and finish a use of pardoning tycoons convicted of white-collar crime.

The presidential Blue House pronounced in a matter that it hopes a statute will offer as an event to “end a sequence of business and politics that has hold behind a country.”

In a Jun talk with Reuters, Moon pronounced he did not trust Samsung’s operations depended usually on Lee.

“When Lee was taken into custody, a share prices of Samsung went up,” Moon said. “If we were to attain in reforming a using of a chaebols and also augmenting transparency, we trust this will not usually assistance a mercantile energy of Korea though also assistance to make a chaebols themselves some-more competitive.”

Investors contend shares in chaebol companies trade during reduce prices than they would differently given of their ambiguous corporate governance – a supposed Korea Discount.

Shares of Samsung Electronics forsaken some-more than 1 percent, and other organisation companies, including Samsung CT and Samsung SDS, also incited reduce after a verdict.

The probity pronounced Samsung’s financial support of entities corroborated by a crony of Park’s, Choi Soon-sil, constituted bribery, including 7.2 billion won ($6.4 million) in sponsoring a equestrian career of Choi’s daughter.

In return, prosecutors say, Samsung sought supervision support for a 2015 partnership of dual of a affiliates, that helped Lee tie control of a conglomerate. His lawyers had argued that a partnership was finished for business reasons.

Some rapist lawyers had approaching Lee to be found trusting of a vital charges, as most of a justification during a hearing has been circumstantial. The appeals probity and a Supreme Court competence put a larger significance on prosecutors to yield approach explanation of quid pro quo, a lawyers said.

PARK SUPPORTERS OUTRAGED

Park, who was forced from bureau in March, faces her possess crime trial, with a statute approaching after this year.

Prosecutors have argued that Park and Lee took partial in a same act of temptation – so Lee’s self-assurance would seem meaningful for a former president.

Hundreds of Park’s doctrinaire supporters who rallied outward a probity on Friday reacted with snub to a ruling.

“Our ultimate idea is Park’s exculpation and release,” Kim Won-joon, a 62-year-old former construction workman said. “We worry how today’s guilty outcome for Lee would impact Park’s ruling.”

Such supporters are a minority compared with a outrageous crowds that incited out in Seoul each week to call for Park’s ouster after a temptation liaison flush late final year.

Public capitulation of Lee’s charge might underscore flourishing disappointment in Asia’s fourth-largest economy that a resources amassed by conglomerates has not trickled down.

“I consider it was formidable for a probity to omit open opinion, given that a liaison rocked a country,” pronounced Chung Sun-sup, arch executive of investigate firm Chaebul.com.

“The five-year judgment was low given that he was found guilty of all a charges. we consider a probity gave him a lighter sentence, holding into comment Samsung’s significance to a economy.”

Additional stating by Jack Kim, Hyunjoo Jin and Dahee Kim, Writing by Soyoung Kim; Editing by Ian Geoghegan, Robert Birsel


Do you have an unusual story to tell? E-mail stories@tutuz.com