South Korea court jails Samsung scion Jay Y. Lee for five years

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SEOUL (Reuters) – A South Korean court jailed Samsung Electronics <005930.KS> Vice Chairman Jay Y. Lee for five years on Friday.

The Seoul Central District Court was delivering its verdict on charges against Lee, 49, ranging from bribery to perjury in a scandal that led to the ouster in March of the then president, Park Geun-hye.

Lee, who denied wrongdoing, has been in detention since February.

Samsung Electronics did not have any immediate comment.

During the trial, Samsung acknowledged it offered to donate about 43 billion won ($38 million) to entities backed by Park’s close friend, Choi Soon-sil, including sponsoring the equestrian career of Choi’s daughter.

In return for the contributions, prosecutors say, Samsung sought government support for a controversial 2015 merger of two of its affiliates, which helped tighten Lee’s control over the conglomerate.

Lee denied wrongdoing, and his lawyers say the 2015 merger was done on business merits.

Prosecutors have demanded a 12-year jail sentence for Lee, who also faces charges of embezzlement and perjury – potentially the longest prison term given to a South Korean business leader.

Park is facing her own corruption trial, with a ruling expected later this year. Prosecutors have argued that Park and Lee two took part in the same act of bribery.

Samsung, founded in 1938 by Lee’s grandfather, is a household name in South Korea and a symbol of the country’s dramatic rise from poverty following the 1950-53 Korean War.

But over the years, it has also come to epitomize the cosy ties between politicians and powerful family-controlled business groups – or chaebols – which have been implicated in a series of corruption scandals.

South Koreans, who once applauded the chaebols for catapulting the country into a global economic power, now criticize them for holding back the economy and squeezing smaller businesses.

South Korea’s new president, Moon Jae-in, who replaced the Park after a May 9 election, has pledged to rein in the chaebols, empower minority shareholders and end the practice of pardoning corporate tycoons convicted of white-collar crime.

Reuters
Republished with permission from Reuters
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