Samsung heir guilty of bribery, gets 5 years

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SEOUL: The heir to the Samsung business empire, which includes the world’s biggest smart phone maker, was sentenced Friday to five years in prison for bribery and other offences in connection with the scandal that brought down South Korean president Park Geun-Hye.

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Lee Jae-Yong’s penalty could leave the giant firm rudderless for years and hamper its ability to make key investment decisions.

The vice-chairman of Samsung Electronics, 49, arrived at Seoul Central District Court on a justice ministry bus handcuffed, bound with white rope around his dark jacket, and carrying an envelope of documents.

GUILTY Samsung Group heir Lee Jae-yong leaves the Seoul Central District Court following his verdict in Seoul on Friday. AFP PHOTO

Lee was found guilty of bribery, embezzlement, perjury and other charges centered on payments and promises by Samsung totalling 43.3 billion won (around $40 million) to Park’s secret confidante Choi Soon-Sil.

The court found the money was in return for policy favors including government support for Lee’s hereditary succession at the group, after his father was left bedridden by a heart attack in 2014.

The defense had denied the charges, saying Samsung was pressured by Park to make the donations under duress—and that Lee was not aware of them and did not approve them. Four other top Samsung executives were also convicted and received sentences of up to four years.

Lee’s lawyers said he would appeal.

The demonstrators who mounted giant candlelit protests against Park last year also targeted Lee and other chiefs of the chaebols, as the family-controlled conglomerates that dominate Asia’s fourth-largest economy are known.

South Korea’s GDP is still growing but social and economic frustrations have mounted over the benefits not being equally shared.

Around 800 riot police were deployed around the court to prevent possible clashes between rival sets of demonstrators, Yonhap said.

It was deluged with hundreds of applications for the 30 seats in courtroom 417 available to members of the public, which were allocated by lottery.

Park’s own trial began in the same room in May, and it also saw Lee’s father Lee Kun-Hee convicted of tax and other offences in 2008, receiving a suspended sentence.

‘Ruling family’
The verdict could add impetus to new President Moon Jae-In’s campaign pledges to reform the chaebols.

The firms have long had murky connections with political authorities in South Korea, and past trials of their leaders have often ended with light or suspended sentences, with courts citing their contributions to the economy.

The Lee clan directly owns about five percent of Samsung Electronics shares, but maintains its grip on the wider group through a byzantine web of cross-ownership stakes involving dozens of companies.

The court said Park was aware that Lee wanted state approval for a controversial merger of two Samsung units in 2015, seen as a key step to ensuring his accession.

The deal was opposed by shareholders who said it wilfully undervalued shares of one of the firms. But it eventually went through after the national pension fund — a major Samsung shareholder—approved it.

Analysts differ on the potential impact of the verdict and sentence on Samsung.

AFP

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