- Lee Jae-yong, heir to South Korean conglomerate Samsung Group, has been sentenced to two and a half years in prison
- The Seoul High Court found him guilty of bribery, embezzlement, and concealment of criminal proceedings, which he was previously accused of
- Having previously served a year in detention for these crimes, Lee will only serve 18 months of his sentence
- The sentencing is likely to seriously impact his influence at Samsung Group, as well as public perceptions of Korean conglomerates
- Since the ruling, the share price of Samsung Electronics and its affiliates have fallen sharply on the relevant stock exchanges
Lee Jae-yong, heir to South Korean conglomerate Samsung Group, has been sentenced to two and a half years in prison.
Lee, often referred to as “the Crown Prince of Samsung” has been Vice Chairman of Samsung since December 2012. He is one of the wealthiest people in South Korea, and also considered to be one of its most powerful citizens.
In 2017, Lee was convicted of bribing an associate of South Korea’s former President, Park Geun-hye. While he was initially sentenced to five years in jail, that sentence was reduced and suspended on appeal after he served only one year in prison.
The Supreme Court then sent that case back to the Seoul High Court, which has now found him guilty of bribery, embezzlement, and concealment of criminal proceedings. Having previously served a year in detention for these crimes, Lee will only serve 18 months of his sentence.
The sentencing is likely to seriously impact Lee’s influence at Samsung Group. During his time in prison, he will be barred from playing any part in major decision-making at the company.
Furthermore, Lee will not be able to oversee the process of officially inheriting the conglomerate from his father Lee Kun-hee, who died in October 2020. In South Korea, large family-owned conglomerates called chaebols still tend to pass ownership of the companies from one family member to the next.
While Lee has pledged not to pass down power to his children, he still seemed likely to accept the position of Chairman upon his father’s demise. This process is crucial to maintaining his control of Samsung, but will probably be delayed until he finishes serving his sentence in jail.
Presiding Judge Jeong Jun-yeong commented on the proceedings, and on the potential impacts of the Court’s ruling.
“[Lee] has shown willingness for management with newly stronger compliance, as he has vowed to create a transparent company,” he said.
“Despite some shortcomings… I hope that over time, it will be evaluated as a milestone in the history of Korean companies as a start of compliance ethics for a greater leap forward,” he added.
Since the ruling, the share price of Samsung Electronics has fallen as much as four per cent on the Korea Exchange. Stock in the company’s affiliates, including Samsung C&T, Samsung Life Insurance, and Samsung SDI have also taken a dip.