Tuesday, September 26, 2023

Samsung Electronics Vice President Jay Y Lee Returned to Jail | Business and economic news

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The verdict sidelines Jay Y Lee from major decisions of the world’s largest electronics company at a time of global uncertainties.

A South Korean court has sentenced Samsung Electronics’ vice president Jay Y Lee to two and a half years in prison, with implications for the tech giant’s leadership and how Koreans view big business.

With Monday’s verdict, Lee will be sidelined from key decision-making at Samsung Electronics as he struggles to overtake his competition and oversee the legacy of his father, who died in October.

Lee, 52, was convicted of bribing an associate of former President Park Geun-hye and jailed for five years in 2017. He denied wrongdoing, the sentence was reduced and stayed on appeal, and he was released after serving one year.

The Supreme Court then sent the case back to the Seoul High Court, which delivered Monday’s ruling.

Under South Korean law, only a prison sentence of three years or less can be suspended. For longer sentences, the person must serve their sentence, unless there is a presidential pardon. With Lee’s return to prison, the year he has already served his sentence should count towards the sentence.

Delayed ascent

Lee’s rise to the presidency of Samsung after his father’s death in October will likely be delayed until his release.

Separately, he faces another case related to a controversial merger between Samsung C&T and Cheil Industries in 2015, which centers on allegations ranging from violation of capital markets law to dereliction of duty. Lee will have to attend the hearings in this case from prison.

Monday’s conviction is open to appeal to the Supreme Court, but as the Supreme Court has already ruled once, its legal interpretation is unlikely to change, legal experts have said.

“In a case referred from the Supreme Court, there is a narrower range of options for the bench … but it is also true that the Supreme Court cannot really touch on the final sentencing of the court,” said Rha Seung-chul, a lawyer unrelated to the case.

The move creates a vacuum atop the world’s largest producer of memory chips, smartphones and consumer devices as the COVID-19 pandemic exacerbates growing global economic uncertainty and competition intensifies.

While Samsung’s day-to-day operations are run by an army of managers, Lee’s absence can block or complicate massive investments or long-term strategic moves. The executive played an active role in the business, frequently joining public and government-related events after his release from prison.


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