Samsung heir found guilty of corruption and embezzlement

Samsung heir found guilty of corruption and embezzlement

PanARMENIAN.Net - A South Korean court on Friday, August 25 convicted Lee Jae-yong, the heir to the Samsung business empire, of bribery and embezzlement and sentenced him to five years in prison, in a dramatic break with the country’s history of dealing light penalties to major business figures, The New York Times reports.

The verdict sends the strongest message yet to South Korea’s big, family-controlled businesses that their more than 60 years of economic dominance in one of the world’s most successful economies is under threat. Those companies helped build an economic powerhouse out of the ashes of the Korean War. Today, they are widely seen as sources of corruption and impediments to the country’s progress.

It also presents new challenges for Samsung, a constellation of businesses so vast that it accounts for about one-fifth of South Korea’s exports all by itself. The electronics company has argued that Lee provided long-term strategic vision and helped cement alliances with key partners like Apple and Google.

The court ruled that Lee and four other Samsung executives paid $6.4 million in bribes and other inducements to ensure that the country’s disgraced former president, Park Geun-hye, supported a complicated corporate deal that strengthened Lee’s grip on Samsung Electronics, the conglomerate’s crown jewel.

While the Samsung executives never expressly asked for Park’s support, the court said, they made the payments to a secret confidant of the former president’s with a wink-and-nod understanding characteristic of the way many South Koreans believe big businesses manipulate politicians. The list of bribes included $3.2 million sent to a front company owned by the confidant, Choi Soon-sil, as well as thoroughbred horses of a similar worth that the company gave to Ms. Choi’s daughter.

“The essence of this case is the unethical bond between politics and money,” said Judge Kim Jin-dong. “The people expect that the power of a president, the top authority under the Constitution, will be used to serve all people and that big businesses act with social responsibility, through legal economic activities.”

“Through this case,” he continued, “the people have come to question the fairness and honesty of the president and have come to distrust the ethical values of Samsung, the largest conglomerate.”

Lee was also found guilty of hiding assets overseas and of perjury for falsely testifying at a parliamentary hearing on the scandal. Other former top executives who advised Lee were also sent to prison or given suspended terms.

Lee occasionally applied lip balm and kept a cool facial expression, which didn’t change as the verdict was announced, according to South Korea’s Yonhap News Agency. Lee, who has been in jail since he was arrested earlier this year, was led back into custody.

Lee’s attorneys immediately said they would appeal, and experts said it would likely go all the way to the country’s supreme court.

“As a legal professional, I cannot possibly accept any part of the lower court’s guilty verdicts,” said Song Wu-cheol, the lead defense attorney, who added, “I am confident that the appeals court will definitely find the defendants not guilty on all counts.”

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