SEOUL (Reuters) – A South Korean court will sentence Samsung Electronics Co Ltd’s heir, Jay Y. Lee, on a bribery charge Monday, a ruling that is likely to affect not only for his company but for all chaebol conglomerates in South Korea.
Lee, 52, was convicted of bribing a companion of former President Park Geun-hye and was jailed for five years in 2017. He was denied, the sentence was reduced and suspended on appeal, and was released after serving a year.
The Supreme Court then referred the case back to the Seoul High Court, which will rule on, and the verdict, Monday. Prosecutors have called for a nine-year prison term.
Legal experts say the court is very unlikely to get Lee but he could overturn his sentence, allowing him to stay free. Lee is involved in a separate trial for accounting fraud and stock handling.
For many South Koreans, Lee will not only be in the dock on Monday but the entire chaebol system of family – run gatherings, long believed to be building the fourth Asia’s largest economy but criticized for consuming too much power and falling in regulation and compliance.
President Moon Jae-in was elected in 2017 on a reformist platform voting to clean up chaebol practices but since then he has encouraged the big businesses to create jobs, especially since the novel coronavirus weakened growth.
Similarly, public sentiment seems to have moved back to the chaebol and many South Koreans would certainly like to see Lee at the helm of the Samsung empire as he sails to global competition. strengthen and emphasize innovation.
“Any presence could affect Samsung from taking big contracts to jump ahead of the competition in areas it is trying to expand into, possibly a competitive buy-in. is struggling in contract chip manufacturing, for example, ”said Lee Jae-yun, an analyst at Yuanta Securities Korea.
‘MITIGATING INFORMATION’
On the broader question of chaebols, said Cho Chang-hoon, a professor at Hallym University of Postgraduate Studies, while conglomerates benefit from centralized decision-making they are often open to attack, including from investors, on environmental, social and regulatory issues.
Lee has pledged to change Samsung and make compliance and social responsibility priorities, in part by ensuring that an independent compliance panel set up last year continues to work.
The ruling judges on Monday have said they will take the compliance issue into account in reaching a decision.
“This is the first test to recommend compliance as a mitigating factor in sentencing and could lead to its use in charisma-led chaebol culture in South Korea as a means of consensus. with external stakeholders, ”said Co.
Lee’s father, Lee Kun-hee, who died in October, was convicted of bribery in 1996 and tax evasion in 2008 but did not serve time in prison and eventually received a presidential pardon, a mercy that was routinely show business leaders.
But such treatment cannot be accepted as a donation. The head of the third largest conglomerate, SK, was serving more than two years in prison for an explosion in 2013-2015.
A petition by 57,440 members of the public and submitted to the president’s office said Samsung was a “South Korean pride” and called on Lee to stay free and run the company that is ‘pay so much in taxes and provide so many jobs.
Reciting with Joyce Lee; Edited by Jack Kim, Robert Birsel