Lee Jae Yong, heir and Vice Chairman of Samsung will spend the next two and a half years in prison, leaving the leadership of the company up in the air.
The Seoul High Court of South Korea sentenced Lee on Monday after they found him guilty of bribery and embezzlement; the case was also a retrial of a ordered by the court.
This retrial stems from the original 2017 case of Lee (also known as Jay Y. Lee) taking part in a bribery and influence-peddling scandal, causing the impeachment and downfall of former South Korean president Park Geun Hye.
At the time of the original trial, Lee received a sentence of five years for bribery and other additional corruption charges. He only served one year of that sentence and was released in 2018; the appeals court ended up throwing out some of his charges, thus suspending his sentence.
Many view this sentencing as a huge blow for the giant tech company. Lee had been serving as Samsung’s de facto leader after his father, Lee Kun Hee, suffered a heart attack in 2014. While it left him comatose, the elder Lee remained chairman of Samsung up until his death last October.
Lee Jae Yong’s sentencing will impact his leadership at Samsung, as well as the company’s ability to make decisions for future large-scale investments going forward. His lawyer, Lee In Jae, calls his verdict “regrettable,” stating that the case is “a violation of corporation’s rights to freedom and property by the former president abusing her power.”
Samsung and the (Former) President of South Korea
So what exactly happened to cause such a downfall between this huge tech company and South Korea’s former president? Let’s break it down.
In 2017, the court accused Lee of paying 43 billion won in bribes to former president Park and her colleague, Choi Soon Sil; Lee reportedly made the payments in exchange for political help in transferring ownership of Samsung from his father to him and moving him higher up in the company; however Lee has consistently said that neither he nor Samsung wanted anything in return.
Park received a sentence of 20 years for her involvement with taking money from not only Samsung, but other large conglomerate companies as well; Choi Soon Sil is also serving an 18-year sentence for her own involvement in the scandal.
Unfortunately, the new verdict doesn’t mark the end of legal problems for Lee Jae Yong. Currently, he faces another trial with charges from 2015.
That year, he sought approval for a controversial merger of two Samsung affiliates; the merger would help cement Lee’s control of Samsung Electronics. While stockholders disapproved, it still went through with support from a national pension fund.
Last September, Lee and 10 other Samsung executives were indicted on charges of stock price manipulation, perjury and illegal transactions in relation to the merger.