By Park Si-soo
Staff Reporter
Former Samsung Chairman Lee Kun-hee, 66, was given a 3-year jail sentence suspended for five years and fined a 110 billion won ($110 million) for tax evasion.
The Seoul Central District Court, however, cleared him of charges of breach of trust and illegal issuance of convertible bonds.
Special prosecutors had sought a seven-year sentence and a 350 billion won ($350 million) fine.
``His crime is not serious enough to put him behind bars,'' said presiding judge Min Byung-hoon in the ruling. ``The accused including Lee had evaded taxes amounting to 45.6 billion won by violating the Tax Law.''
The judge said that it's ``difficult to say that Lee committed breach of trust'' involving the transfer of group control to his only son Jae-yong.
All other Samsung executives also received suspended sentences or were acquitted. Lee Hak-soo, the group's former vice chairman, and Kim In-joo, former president of the group`s Strategic Planning Office, both of whom have allegedly masterminded a series of Samsung's wrongdoings, received suspended jail terms.
Emerging from court, Lee told reporters that he is sorry for ``causing concern to the public.'' Asked whether he expected a suspended jail term, he said, ``It's not something that can be expected.'' To the question whether the ruling has lightened his responsibility, he said, ``I should still take responsibility.''
Special prosecutors said they plan to appeal the case.
The ruling invited harsh criticism from civic activists who called the decision ``shameful.''
``The ruling reversed Korea's decade-long efforts to increase transparency in family-controlled conglomerates called chaebol and paved the way for other tycoons to transfer their wealth to their children, evading taxes,'' Kim Sang-jo, executive director of the Solidarity for Economic Reform, told reporters.
The probe against the tycoon and Samsung was prompted by a series of corruption allegations by a former in-house lawyer Kim Yong-chul that the nation's largest conglomerate created a large slush fund to bribe prosecutors, public officials and other influential figures.
In April, special prosecutors headed by Cho Joon-woong indicted Lee for evading taxes, breach of trust and violating the securities exchange law after a three-month probe into the Samsung Group ended on April 17. Prosecutors said there was not enough evidence to make a bribery case.
Prosecutors said they found 4.5 trillion won ($4.5 billion) of Lee's personal assets under borrowed names and determined he evaded taxes worth 112.8 trillion won ($112 million). Lee was also charged with failing to report to the securities authorities changes in the ownership of his stocks.
His breach of trust charge resulted from Lee having been briefed by aides about dubious financial transactions to transfer corporate control to his son including sale of bonds convertible to shares to his children at below-market prices, which allegedly inflicted damage to subsidiaries.
The tycoon has been accused of transferred his wealth to Jae-yong through illicit securities transactions at group affiliates, including Samsung Everland, the group`s de-facto holding company, and Samsung SDS. Lee was also charged with evading taxes amounting to 112.8 billion won, which were due on the 564.3 billion won in capital gains from securities transactions done under borrowed-name accounts at group affiliates.