A South Korean high court has sentenced Samsung heir Lee Jae Yong to a 30 month jail term. The heir was jailed after the retrial of an earlier bribery case involving former South Korean president who was also jailed for bribery and corruption.
The sentence is expected to have a negative effect on Samsung’s business considering Lee has been the de facto leader of the tech giant since 2014. This event will however put him in the sidelines when it comes to making any decisions for the company.
Samsung’s shares sunk 4 percent following the announcement of his sentencing, before stabilizing again.
“It’s really a huge blow and a big crisis for Samsung,” Kim Dae-jong, a business professor at Sejong University, told news agency AFP.
Lee’s court verdict stated that he “actively provided bribes and implicitly asked the president to use her power to help his smooth succession” at the head of Samsung.
“It is very unfortunate that Samsung, the country’s top company and proud global innovator, is repeatedly involved in crimes whenever there is a change in political power.”
Lee was first arrested in 2017 over allegations of political and corporate scandals linked to the then South African President Park Geun-hye.
Samsung was accused of paying $37.7 million to two non-profit organizations founded by a close friend of Park, Choi Soon-sil. The payment was made in exchange for Park’s political support for a controversial Samsung merger between Cheil Industries and Samsung C&T, with an aim of helping him gain more power.
Lee denied the charges against him, saying Samsung did not want anything in return.
He was sentenced after he was found guilty of bribery, embezzlement and concealment of criminal proceeds worth about $7.8 billion. According to the court, Samsung set up an independent compliance committee in early 2020, but it is still not fully effective.
Lee’s defense team expressed disappointment with the ruling.
“The nature of this case is the former president’s abuse of power violating corporate freedom and property rights. Given that nature, the court’s decision is regrettable,” Lee’s lawyer, Lee In-jae, told reporters.
He assumed leadership of the tech giant after his father suffered a heart attack in 2014. The elder Lee died last year.
Lee has already served 12 months in detention, which will be counted towards his total jail term, leaving him with 18 months or one and a half years.