Samsung heir freed from S Korea jail

Samsung heir Lee Jae-yong has been freed from jail after a South Korean court suspended his five year jail term for bribing the country’s ex-president.

An appeals court upheld parts of the conviction, but used its discretion to release the executive.

South Korea’s supreme court is expected to appeal against the decision.

The case gripped the public amid growing anger against the country’s biggest companies, known as chaebols, and their influence on wider society.

Scandal

Last year a lower court jailed Lee for corruption in a political scandal that ultimately brought down former President Park Geun-hye.

The Samsung Electronics vice chairman, who is also known as Jay Y Lee, had appealed against both the verdict and sentence.

The scandal exposed the ties between family-run conglomerates and political powers.

Samsung Electronics is regarded as the jewel in the crown of the Samsung Group conglomerate, which is made up of 60 interlinked companies.

Lee, 49, has effectively directed operations at the mobile phone and chip maker since his father, Lee Kun-hee, was incapacitated by a heart attack in 2014.


‘A dramatic turnaround’ – Analysis by Karishma Vaswani, Asia Business Correspondent

A dramatic turnaround in fortunes for Samsung scion Lee Jae-yong.

There were many outcomes that could have taken place today. But it would be fair to say that Mr Lee walking out of jail was the one that was least likely

Mr Lee’s release today will be a major relief to the world’s biggest smartphone marker and arguably the most important company in Corporate Korea.

Sources inside Samsung tell me that while the company hasn’t seen its share price or profits affected in the short term from Mr Lee’s absence, long term it was going to struggle especially with strategy and future direction.

And you can see the immediate impact of that from the pop in Samsung’s share price this Monday – a sign that investors are looking forward to Mr Lee back in the driving seat.

While Samsung insiders won’t confirm to me whether it will be back to work as usual, we can expect a Supreme Court challenge is extremely likely.

But there are also political consequences to this latest move.

South Korea’s new President Moon Jae-in won office by campaigning to clean up the powerful chaebol sector in Korea.

But many will see the court ruling as effectively a get out of jail card for Mr Lee that goes against everything the president stood for.

In an ironic twist, in 2009, Mr Lee’s father, the elder Lee was also released from prison on embezzlement and tax evasion charges so that he could help lobby for the 2018 Seoul Winter Olympics – an event which begins this week.

 

BBC.com

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