Seoul: The de facto head of South Korea’s Samsung business empire faced a verdict in a trial on Monday that involved a wide-ranging corruption scandal. The verdict could put him in jail for years and deprive the tech giant of its top decision. Status.
Officially, Lee Jae-yong is vice-chairman of Samsung Electronics, the world’s biggest smartphone and memory chip maker, but he has effectively been at the head of the massive Samsung group for several years after his father was left bedridden by a heart attack, finally dying in October.
Samsung is by far the biggest of the family-controlled conglomerates, or chaebols, that dominate business in the world’s 12th-largest economy.
Its overall turnover is equivalent to a fifth of the national gross domestic product and it is crucial to South Korea’s economic health.
Lee was jailed for five years in 2017 for bribery, embezzlement and other offences in connection with the scandal that brought down South Korean president Park Geun-hye.
An appeals court dismissed most of his bribery convictions and gave him a suspended sentence the following year, but the Supreme Court later ordered the 52-year-old to face a retrial.
The case centres on millions of dollars the Samsung group paid Park’s secret confidante Choi Soon-sil, allegedly for government favours including ensuring a smooth transition for Lee to succeed his then-ailing father.
The scandal highlighted the dark connection between big South Korean companies and politics. The deposed president and her friends were accused of taking bribes from corporate bosses in exchange for preferential treatment.
In May of this year, Lee Kuan Yew made a rare public apology and bowed in front of a camera flashing for company misconduct, including the company’s controversial plan for his promotion to leadership.
He promised that his children would not succeed him as senior management positions in the company.
Lee Kuan Yew’s father Lee Kun Hee and grandfather (Samsung founder Lee Bingzhe) both abide by the law by themselves, but never served their sentences in prison.
Earlier this month, Samsung Electronics, the group’s flagship subsidiary, flagged a jump of more than 25 percent in fourth quarter operating profits, citing benefits from pandemic-induced working from home that boosted demand for devices powered by its chips.
Analysts forecast a stable outlook for the company in 2021, driven by continued demand for memory chips.
Its rise has been driven by a willingness to invest billions in strategic bets on key technologies, but experts say Monday’s ruling could hamper its decision-making on future large-scale investments if Lee is jailed.