SEOUL (Reuters) – A South Korean court has sentenced Samsung Electronics Vice President Jay Y. Lee to two and a half years in prison, the court said Monday, which will have major ramifications for the tech giant’s leadership and views. Korea to big business.
With this, Lee will be excluded from major decision-making at Samsung Electronics for the time being, as he strives to outperform competitors. He will also not be able to oversee the inheritance process from his father, who died in October, crucial to maintaining control over Samsung.
Lee, 52, was convicted of bribing an associate of former President Park Geun-hye and was jailed for five years in 2017. He denied committing wrongdoing, the sentence was reduced and suspended on appeal, and was released after serving one year.
The Supreme Court then sent the case back to the Seoul High Court, which issued the ruling on Monday.
The Seoul High Court found Lee guilty of bribery, embezzlement and concealment of criminal proceeds worth about 8.6 billion won ($ 7.8 million) and said the independent Samsung compliance committee set up at the beginning last year has not yet become fully effective.
“(Lee) showed his willingness to lead, with a stronger compliance, as he vowed to create a transparent company,” said Chief Justice Jeong Jun-yeong.
“Despite some shortcomings … I hope that in time, it will be evaluated as an important milestone in the history of Korean companies, as a beginning of compliance ethics for a bigger leap forward,” he said.
Lee, dressed in a dark coat and silver tie and sitting to hear the sentence, sat down after reading it.
“The nature of this case is the abuse of power by the former president who violates corporate freedom and property rights. Given this nature, the court’s decision is unfortunate, “Lee’s lawyer, Lee In-jae, told reporters.
With Lee’s return to prison, the year he has already served in prison is expected to count for his sentence – leaving 18 months to serve his sentence.
Monday’s conviction can be challenged in the Supreme Court within seven days, the judge said, but legal experts said that because the Supreme Court has already ruled once, its legal interpretation is less likely to change.
Shares in Samsung Electronics fell by up to 4% after the decision, while shares in subsidiaries such as Samsung C&T, Samsung Life Insurance and Samsung SDI also fell sharply.
Reporting by Joyce Lee; additional reporting by Choonsik Yoo. Editing by Gerry Doyle