Samsung heir sentenced to 5 years
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Lee Jae-yong, right, Samsung Electronics vice chairman, is escorted to a prison bus after attending his ruling trial at the Seoul Central District Court in Seoul, Friday. Lee was sentenced to five years in prison on multiple corruption charges, including bribery and embezzlement. / Yonhap
- Court upholds bribery, most other charges
- Court acknowledges Lee's charges of bribery, embezzlement, concealment of criminal proceeds, illegal overseas asset transfer.
- Court says Lee embezzled 6.4 billion won.
- Court: Samsung's Lee involved in donations for equestrian training of daughter of Park's confidante.
- Court says Samsung heir Lee provides bribes in anticipation of favors for power transfer.
- Court says merger of Samsung units seen as related to power transfer to heir Lee.
- Court says Samsung's Lee is not believed to have sought favors during meetings with ex-President Park.
- Court acknowledges Lee's charges of perjury.
By Lee Kyung-min
Samsung Electronics Vice Chairman Lee Jae-yong was sentenced to five years in prison for bribery and other charges, Friday.
The prosecution indicted Lee in February for offering 43.3 billion won ($38.5 million) to former President Park Geun-hye and her longtime confidant Choi Soon-sil in return for political favors to help him secure control of the nation’s largest conglomerate.
Lee was charged with bribery, embezzlement, hiding assets and criminal proceeds abroad and perjury, all for which he was found guilty and convicted.
This could affect the verdict of Park whose sentencing is scheduled for late October, as the prosecution earlier alleged that Lee and Park conspired to commit bribery.
Lawyers for Lee said Samsung will appeal the ruling, denying all the charges upheld by the court. The group declined to comment on the ruling.
In its ruling, the Seoul Central District Court said Lee offered the money knowing and expecting his company would benefit if he complied with Park’s request to cultivate the country’s young equestrian talents.
But the court did not recognize that Lee actively solicited illicit favors. Choi’s daughter Chung Yoo-ra is a former equestrian competitor, the core beneficiary of Samsung’s support.
“Lee was the central figure and the figure that was to benefit most in this case. He ordered and facilitated support of Chung and played the largest role in the whole process,” presiding judge Kim Jin-dong said in the ruling.
However, the judge acknowledged mitigating circumstances for giving a five-year term instead of 12 years, which special counsel Park Young-soo earlier sought.
“Lee did not actively seek illicit favors but only had to passively accept requests by Park. He was in a difficult position to refuse a request from the leader of the country, the most powerful figure,” he said.
The court said the case fundamentally betrayed the expectation required of business groups to uphold and maintain fairness and social responsibility.
“Due to this influence-peddling scandal, the public is left to fundamentally question the principle of fairness and business ethics,” the judge said.
The court also recognized it constituted bribery even if a public official (Park) was not offered a direct illicit favor and helped another party (Choi) benefit. This recognized special counsel Park Young-soo’s claim that the two conspired to commit extortion.
The counsel earlier claimed the case is a typical example of corruption between political and business circles at the highest level.
The court did not recognize Lee’s claim that the counsel lacked evidence and was based on pure conjecture without concrete evidence. The defense also claimed the indictment heavily relied on the public sentiment against the powerful and the most affluent conglomerate.
Both the special counsel and Samsung had acknowledged that the money was given to Choi and Chung.
The special counsel had claimed the money Samsung gave to Chung for equestrian practices including purchasing expensive horses constituted bribery, but Samsung denied this claiming it was a result of simple extortion.
Earlier, former Samsung executives said they were among many business groups here who were victims of extortion engineered by Choi through two foundations she set up — Mir and K-Sports.
Of the total 43.3 billion won, 20.4 billion won given to the two foundations was not bribery as Samsung gave the money without expecting any favors in return, the court said.
The court said the company merely paid the amount each business earlier agreed to bear, a decision made by the Federation of Korean Industries, a business lobby connected to the scandal.
The court recognized 7.2 billion won, paid in the form of support for equestrian practice for Chung, as a bribe. It was among 7.79 billion won which the prosecution earlier claimed was given as such a practice.
In the process, the court said, Samsung embezzled 6.4 billion won to support the equestrian activity and 1.6 billion won to support Grand Korea Leisure (GKL), an affiliate of the Ministry of Culture, Sports and Tourism managed by Choi’s niece Jang Si-ho.
Former Samsung executives Choi Gee-sung and Jang Choong-ki, who worked at the now-disbanded Future Strategy Office, the group’s de facto control tower, were both sentenced to four years after being found guilty of all charges except perjury. They were immediately put behind bars.
Former Samsung Electronics President Park Sang-jin was sentenced to three years, suspended for five years.
Former company executive vice president Hwang Sung-soo was sentenced to two and a half years, suspended for four years.
Song Woo-chul, a lawyer for Samsung Group, said, “We cannot accept the court rulings. We will immediately appeal. We are confident all the charges will be rejected at the appeal.”
The ruling has concluded the first round of Lee’s trial which lasted for 178 days since Feb. 28, when he was put on trial. The court has since held 53 hearings and 59 witnesses have testified.
For its part, the presidential office issued a statement on the ruling: “The case should serve as momentum for the nation to cut cronyism ties between politics and business.”
The court’s guilty verdict of the Samsung heir is expected to deal a blow to the group’s brand image and adversely affect the group’s management as a whole due to the leadership vacuum.
Group officials said the group will have to delay major decisions on investments and acquisitions for a while.
Samsung Electronics shares closed down 1.05 percent or 25,000 won at 2,351,000 won. The benchmark KOSPI closed up 0.11 percent at 2,378.51.