Samsung faces growing uncertainty after court ruling on its chief
Samsung Electronics building at Seocho, southern Seoul / Yonhap
Business circles express regret amid economic downturn
By Jun Ji-hye
Samsung Electronics is facing growing uncertainties and a possible leadership vacuum Thursday after the Supreme Court dismissed an appeals court ruling which had given a suspended sentence to Vice Chairman Lee Jae-yong.
In accordance with the ruling, Lee needs to go through a tough hearing process and could be incarcerated again as the nation's highest court did not agree with the ruling from the appeals court that acquitted Lee of most criminal charges filed by a special counsel team.
This is expected to deal a heavy blow to Samsung Electronics at a time when the tech giant has been hit by a series of negative business conditions including Japan's export restrictions on key high-tech materials vital to making chips and displays, as well as a steep downturn in the global semiconductor market.
“Samsung may be in trouble as the possibility for Lee to be incarcerated again cannot be ruled out,” lawyer Jeong Tae-won said.
Lee was in prison as the lower court imposed a five-year jail term for his involvement in the corruption scandal that unseated former President Park Geun-hye.
The high-profile corruption scandal that hit the nation in late 2016 involved ex-President Park, her longtime confidante Choi Soon-sil, Choi's daughter Chung Yoo-ra and Lee as well as many other politicians and business figures.
He was released in February 2018 after the appeals court reduced the jail term to two years and six months suspended for four years, reversing most criminal charges against Lee.
The lower court judged that Lee had given a total 8.9 billion won ($7.3 million) in bribes to Choi and others in order to indirectly influence then-President Park to give special consideration for Lee's management succession.
But the appeals court significantly reduced the amount of bribes Lee had paid to 3.6 billion won, concluding that Samsung lent three horses instead of buying them for Choi's daughter in supporting her equestrian training, thus the 3.4 billion won that Samsung used to purchase the horses were not bribes.
Lee was also acquitted of giving 1.6 billion won in bribes for sponsoring a sports center run by a relative of Choi.
But the Supreme Court said the 3.4 billion won to purchase horses and the 1.6 billion to sponsor the sports center were all considered bribes.
After the ruling was announced, Samsung Electronics said it will try to overcome the crisis to contribute to the nation's economy, and not to repeat the same mistake.
“We have faced difficulties for years due to uncertainties both at home and abroad,” a company official said. “It has been also difficult for us to focus on preparing to lead the future industry.”
Meanwhile, economic organizations expressed their regret, raising concerns that the ruling would constrict Samsung's management activities and adversely affect the nation's economy.
“It is regretful that uncertainties, which have already deepened amid Japan's export curbs and the U.S.-China trade war, would last for the time being,” the Federation of Korean Industries (FKI) said in a statement.