Home Technology News South Korean president pardons Samsung heir for bribing predecessor

South Korean president pardons Samsung heir for bribing predecessor

0
12
South Korean president pardons Samsung heir for bribing predecessor
Placeholder while article actions load

The de facto leader of Samsung received a presidential pardon on Friday, wiping clean the billionaire scion’s criminal record from a massive corruption scandal that ignited nationwide protests in 2017 and reinvigorating a crucial player in the South Korean economy.

Lee Jae-yong, who goes by Jay Y. Lee in the West, had been imprisoned for bribing South Korea’s former president, Park Geun-hye, but was paroled after serving 18 months of his sentence. The pardon allows Lee to formally resume control of the manufacturing conglomerate known for an expansive array of consumer electronics, semiconductors and other products, clearing the five-year employment ban that had been a part of his sentence.

The move was widely embraced by business leaders and the broader public in the view that freeing him would inject a competitive boost into the economy. A powerhouse corporation with dozens of affiliates, Samsung is among a group of family-controlled conglomerates that dominate economic life in South Korea. So pivotal are these businesses that many tycoons convicted of white-collar crimes have been pardoned to help limit the economic fallout from the absence of key executives.

But such special treatment, as well as the cozy relationship between top business and government officials, has also drawn public outcry from anti-corruption reformers and political opponents. Moon Jae-in, the former president of South Korea, vowed to combat the outsize influence of family-owned conglomerates after his 2017 election. But it was under his administration that Lee was first released from prison last year, highlighting the political popularity of extending such forgiveness in the name of economic necessity.

Samsung’s size and influence underscores its importance to the South Korean economy: An estimated 5 million of its citizens own shares of Samsung, whose sprawling operations span not just popular mobile phones and electronics but the building of roads and oil rigs, operating hotels and amusement parks and selling insurance. The do­-everything monolith also is the largest of the country’s chaebol — the Korean term for family-controlled corporate groups that were jump-started with government support — contributing more than 10 percent of South Korea’s gross domestic product. It made about 77.2 trillion South Korean won in the second quarter of 2022, or about $59 billion. It has a market capitalization of more than $300 billion.

Lee’s actions played into a sensational corruption scandal that came to be known as “Choi-gate” after Choi Soon-sil, a close friend of Park who came to be known as the “shadow president.” Citizens responded with candlelight vigils starting in 2016.

The demonstrations drew hundreds of thousands of people to Seoul, who took to the streets to call for Park’s resignation through songs, shouts and placards, according to reports by The Washington Post. The scale of the protests, and their largely nonviolent nature in comparison to demonstrations of decades past, put a spotlight on Park and her informal adviser.

Samsung was accused of paying or promising to pay the equivalent of $38 million in return for government support for the merger of two subsidiaries, while Lee and four former Samsung executives were convicted of paying bribes totaling $6.4 million, including paying for equestrian training for Choi’s daughter. The merger was eventually approved.

Lee was found guilty of bribery, embezzlement, illegally moving assets overseas, concealing criminal proceeds and perjury.

“I am deeply grateful for the opportunity to make a new start,” Lee said in a statement following the announcement of the pardon. “I will work hard to fulfill my responsibility as an entrepreneur,” he said.

Recent polling showed overwhelming support for the pardon, with more than three-quarters of the South Korean public backing it.

“In a bid to overcome the economic crisis by revitalizing the economy, Samsung Electronics vice chairman Lee Jae-yong, whose suspended prison term ended recently, will be reinstated,” the South Korean government said in a statement, reported by the Financial Times.

The pardon marks the latest chapter for the powerful Lee family. Several of its members have been implicated in corruption schemes, often involving Samsung, only to be let off the hook.

Lee’s father, the late Lee Kun-hee, also received a presidential pardons following separate convictions, one for bribery and then tax evasion.

He too was pardoned, in 1997, for bribing a former president. The second occurred in 2008, after a company official said the company kept a secret stash of funds to bribe government officials, prosecutors, judges and politicians.

Prosecutors could not prove bribery in that case, but did indict Lee on tax evasion for hiding money in stock accounts under the names of his aides. That conviction forced him to step down from his leadership post, but he retook the helm two years later so he could work on a lobbying campaign that brought the 2018 Winter Olympics to PyeongChang. The older Lee passed the reins of the company to his son after he was incapacitated by a 2014 heart attack.

President Yoon Suk-yeol, who was sworn in earlier this year, is a first-time politician and former prosecutor general who began his five-year term as the nation faces an array of economic challenges: soaring housing prices, deepening income inequality and the reverberations of the coronavirus pandemic.

Yoon, 61, must also work alongside a parliament controlled by the opposing party, governing over a divided electorate that voted him into office with the narrowest margin in the country’s democratic history.

Loading…

Go to Publisher: Technology
Author: Hamza Shaban