April 27, 2024

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[THE INVESTOR] A Seoul court on Aug. 25 sentenced Samsung Electronics Vice Chairman Lee Jae-yong to five years in jail over charges connected to the corruption scandal that led to former President Park Geun-hye’s ouster.

After five months of trial, the Seoul Central District Court acknowledged in its verdict that Samsung’s heir sought favors from Park in exchange for large donations to foundations controlled by her close friend Choi Soon-sil.

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“The essence of the case is the close links between political power and economic power,” the presiding judge Lee Jin-dong said.

“This case stemmed from Lee Jae-yong, who was preparing for a leadership transfer, and Samsung executives offered bribes to the president, who holds immense power and the ultimate authority, expecting a favor in the group’s leadership transition,” he said.

Lee is the first member of Samsung Group’s owner family to be sentenced to a jail term. He is set to appeal.

Lee, who has been detained since February, was on trial on a total of five charges including bribery, embezzlement and hiding assets overseas. Samsung had offered 43.3 billion won ($38.3 million) in donations to entities controlled by Choi and in sports sponsorship to Choi’s daughter for her equestrian training.

The court said that all charges are acknowledged. Out of the 43.3 billion won seen as a bribe by a special counsel, only part of the amount was acknowledged as a bribe by the court.

Four former and incumbent Samsung Group executives, who stood trial along with Lee, were also jailed.

Former Samsung Group Vice Chairman Choi Gee-sung and former President Chang Choong-ki were sentenced to four years in prison for their “heavy” involvement in implementing the bribery scheme, the court said. Former Samsung Electronics President Park Sang-jin received a three-year jail term, suspended for five years, and Executive Vice President Hwang Sung-soo was sentenced to 2 1/2 years, suspended for four years.

“We cannot accept the verdict,” said Lee’s lawyer  Song Woo-chul.

The special counsel had claimed that the money offered by Samsung was a bribe to win the government’s backing for a 2015 controversial merger of two Samsung affiliates, Cheil Industries and Samsung C&T -- a crucial step for a smooth leadership transition from the ailing Samsung Chairman Lee Kun-hee to his only son Lee Jae-yong.

Former President Park, in return for the money, is suspected of having pressured the state-funded National Pension Service, the largest stakeholder in Samsung C&T, to vote in favor of the controversial merger. The merger was opposed by many shareholders who viewed it as only helping Lee tighten his grip over the conglomerate.

Prosecutors sought a 12-year jail sentence for Lee, who has denied all charges.

Samsung did not deny donating money to the Choi-controlled foundations, but the four executives who were on trial alongside Lee said that they had been forced to donate money out of fear of what Park and Choi could do to their business.

Lee said that the donations were made without his knowledge, adding that all key decisions from the controversial merger to the donations to the Choi-controlled entities had been signed off by his mentor, former Samsung Group Vice Chairman Choi Gee-sung.

Handcuffed and bound with rope around his black suit, Lee stepped out of the Justice Ministry’s bus at around 1:36 p.m. to hear his verdict at courtroom No. 417. The courtroom is where his father Lee Kun-hee received a suspended jail term for bribery and tax evasion in 2008.

Reflecting public interest, the room was filled with the accused’s family members, lawyers and reporters, as well as spectators. More than 450 people applied for just 30 seats in the 150-seat courtroom to witness what has been dubbed the “trial of the century.”

The ruling is likely to deal a blow to former President Park and her friend Choi, who are at the center of the corruption scandal that drove millions of Koreans into the streets last winter and eventually removed Park from office. They are on trial over charges of receiving bribes from local firms including Samsung, with the ruling expected in October.

There had been pressure on the court to convict Lee, amid public anger in the face of the corruption scandal, which people believe symbolizes an unfair and unjust society that only benefits the most powerful in the country.
Chaebol owners have long gotten away with light or suspended sentences, with courts citing their contributions to the nation’s economy. Lee’s father also had his terms suspended and was set free through a presidential pardon.

About 800 riot police were deployed around the court to prevent possible clashes between protesters in favor and against Lee’s verdict. They were gathering there either to call for a heavier punishment or his release from prison.

By Ock hyun-ju/The Korea Herald (laeticia.ock@heraldcorp.com)