South Korea’s Samsung heir faces doomsday after four-year corruption trial By Reuters

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By Joyce Lee SEOUL (Reuters) – A South Korean court will sentence Samsung Electronics (OTC 🙂 Co Ltd heir Jay Y. Lee on Monday on a bribery charge, a ruling likely to have ramifications not just for his company, but for the entire South Korean chaebol conglomerates. Lee, 52, was found guilty of bribing an associate of former President Park Geun-hye and jailed for five years in 2017. He denied wrongdoing, his sentence was reduced and suspended on appeal, and he was released after serving one year. . The Supreme Court then sent the case back to the Seoul High Court, which will rule on it and sentence it on Monday. Prosecutors have called for a nine-year jail term. Legal experts say the court is highly unlikely to acquit Lee, but it could suspend his sentence, allowing him to remain free. Lee is involved in a separate lawsuit for accounting fraud and stock manipulation. For many South Koreans, it is not just Lee who will be in the dock on Monday, but the entire chaebol system of family conglomerates, long credited with building Asia’s fourth-largest economy, but criticized for exercising too much. power and failures in governance and compliance. President Moon Jae-in was elected in 2017 on a reformist platform that promised to clean up chaebol practices, but has since encouraged large companies to create jobs, especially as the new coronavirus undermined growth. Similarly, public sentiment seems to have returned in favor of chaebol and many South Koreans would like to see a decisive Lee at the helm of the Samsung empire (KS 🙂 as he navigates intensifying global competition and pressure to innovate. “Any absence could affect Samsung from agreeing to major deals to get ahead of the competition in the fields it is trying to expand into, perhaps buying a struggling competitor in contract chip manufacturing, for example,” said Lee Jae- yun, an analyst at Yuanta. Korean values. ‘MITIGATING FACTOR’ On the broader issue of chaebols, Cho Chang-hoon, a professor at Hallym University of Graduate Studies, said that while conglomerates benefit from centralized decision-making, they are often open to attack. , including investors, on environmental, social and governance issues. Lee is committed to changing Samsung and making compliance and social responsibility top priorities, in part by ensuring that an independent compliance panel established last year continues to operate. The judges who will rule on Monday have said they will take the issue of compliance into account when making their decision. “This is the first trial that proposed compliance as a mitigating factor in sentencing and could lead to it being used in the chaebol-led South Korean chaebol culture as a way to build consensus with external stakeholders,” Cho said. . Lee’s father, Lee Kun-hee, who died in October, was convicted of bribery in 1996 and tax evasion in 2008, but never served time in jail and eventually obtained a presidential pardon, an indulgence generally shown to leaders. business. But that treatment can no longer be taken for granted. The leader of the third-largest conglomerate, SK, served more than two years in prison for embezzlement in 2013-2015. A petition signed by 57,440 members of the public and presented to the presidential office hailed Samsung as “the pride of South Korea” and called for Lee to stay free and run the company that pays so much in taxes and provides so many jobs.