] The trial of de facto Samsung leader Lee Jae-yong
began on Mar. 9 to determine whether he offered bribes to President Park Geun-hye and her friend to expand his control over the tech conglomerate.
The 49-year-old heir didn’t appear as the court was holding a pretrial conference. Unlike a formal trial, an accused is not obligated to attend the court in preparation. But a group of 11 elite lawyers representing Lee waged a battle against special investigators who indicted the vice chairman of Samsung Electronics
of providing 44.3 billion won (US$38.3 million) to Park’s longtime friend Choi Soon-sil, in return for business favors.
Investigators believe that Lee and other Samsung executives gave the money to four organizations operated by Choi in exchange for Park using her power to clear policy hurdles for Lee’s succession. Lee is also accused of perjury, and embezzlement.
Samsung has denied any wrongdoings, claiming that Lee was “forced” to offer money by the president.
The lower court is likely to deliver a ruling by the end of May, according to the law that stipulates the court to make the decision within three months. If Lee loses and appeals to higher courts, the trials could take more than two years, according to legal experts here. He could be sentenced to up to five years in jail, if found guilty, they added.
On the first day of the trial, Samsung remained mute. The legal affairs team under the now defunct Corporate Strategy Office until last month had handled the case. As Samsung disbanded the office, Lee’s case is being defended by a major law firm Bae, Kim & Lee in Seoul, entirely on his expenses, the company said.
In contrast from the grim courtroom, the tech giant’s share prices kept on rallying, surpassing the 2 million won mark per share, the highest closing price ever on Mar. 6.
The market seems to be separating the owner risk from Samsung Electronics, and rather appears to have stronger expectations on Samsung’s shareholder-friendly programs such as its quarterly cash return policy that starts this year as well as the favorable market condition that could further support the company’s growth.
“The trial result is the variable factor to the market sentiment toward Samsung Electronics,” said Kim Yong-koo, a stock market analyst at Hana Investment and Securities.
“But the owner risk appears to have a limited impact as Samsung’s fundamentals remain strong and the market condition is favorable to the company. There‘s also strong expectation on the tech giant for improving its shareholder-friendly system up to a global level.”
Morgan Stanley also raised its price target to 2.3 million won on Mar. 9, pointing out better-than-expected performance of Samsung’s chip businesses and a possible market hit of Galaxy S8.
Share price of Samsung Electronics remained unchanged from the previous day at 2.01 million won.
By Cho Chung-un/The Korea Herald