Wednesday, February 1, 2023

South Korean court returns Samsung to jail for corruption

Must read

[ad_1]

The South Korean appeals court threw out SamsungLee Jae-yong is back in prison for corruption in a landmark decision that will leave the country’s largest conglomerate without its top decision-maker for a year and a half.

The Seoul High Court on Monday sentenced Lee to two and a half years in prison following a retrial, though prosecutors had asked for a nine-year term. The billionaire, who was immediately detained after the judgment, will only spend 18 months behind bars as he previously spent a year in prison before being released by a court of appeal in 2018.

The final decision, which follows years of legal disputes, is a setback for Samsung, whose electronics unit is the world’s largest maker of computer chips, smartphones and electronic displays.

The case has come under close scrutiny as a test of the government’s resolve to reform South Korea’s powerful family conglomerates, known as the chaebol.

Samsung shares fell 3.4% in Seoul trading on Monday.

Lee’s retrial took place after Supreme Court overturned the decision of a lower court in 2019.

The court said Lee had shown willingness to make the group more transparent by setting up a stronger compliance committee, but questioned its effectiveness.

Lee has been the de facto head of Samsung since 2014, when his father, then president Lee Kun-hee, suffered a heart attack. He officially took control of the group after the death of his father in October.

Lee Jae-yong was initially convicted in 2017 and sentenced to five years in prison for bribing former President Park Geun-hye in an alleged attempt to gain control of Samsung. Park was indicted and sentenced to 20 years in prison.

The Supreme Court of South Korea had ruled that the horses donated by Samsung for training by the daughter of Park’s confidante, Choi Soon-sil, and the company’s contribution to a sports foundation controlled by Choi should be considered a bribe.

“Today’s decision is too generous,” said Park Sang-in, professor of economics at Seoul National University. “He should have been sentenced to at least five years in prison, given his serious crimes.”

However, some analysts expected a reprieve for Lee on Monday, given Samsung’s importance to the South Korean economy, which has been hit by the coronavirus. “It’s positive in what some. . . judicial justice has been achieved. The authorities appear to have struck a balance between economic growth and chaebol reform, ”said Park Ju-geun, head of market research firm CEOScore.

Lee In-jae, Lee’s attorney, regretted the court ruling following the ruling. “The case concerns the former president abusing her power and encroaching on the freedom of companies and [Samsung’s] property rights. ”

Lee’s imprisonment comes at a critical time for Samsung, which is accelerating its push towards technologies such as artificial intelligence and parts for autonomous vehicles.

Lee’s plans to reorganize Samsung’s broad business interests are expected to be put on hold. The Lee family faces a tax bill of up to $ 10 billion expected to trigger a series of complex stock sales to non-essential units. “Group-wide restructuring and its aggressive investments in new businesses will likely be put on hold,” CEOScore’s Mr. Park said.

President Moon Jae-in, a former human rights lawyer entering the final 12 months of a five-year term, on Monday sought to defend his attempts to reform powerful family conglomerates like Samsung and Hyundai, which dominate the South Korean economy.

Asked by the Financial Times about the failure of these reforms, Moon referred to his government’s amendments to company and labor laws aimed at strengthening the rights of small shareholders and workers, respectively.

[ad_2]

- Advertisement -spot_img

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest article