The Korea Herald


Samsung heir jailed 5 years for bribery

By Ock Hyun-ju

Published : Aug. 25, 2017 - 15:32

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A Seoul court on Friday sentenced Samsung Electronics Vice Chairman Lee Jae-yong to five years in jail on charges connected to the corruption scandal that led to former President Park Geun-hye’s ouster. 

The Seoul Central District Court convicted Samsung’s de facto heir of bribing former President Park Geun-hye and her close friend Choi Soon-sil in return for the government’s help in tightening his control over Samsung Group, saying he was in position to benefit most from the bribery scheme.

“The essence of the case is collusive ties between political power and capital power,” presiding Judge Kim Jin-dong said. “As Samsung executives, they had a great deal of negative impact on society and the economy."

Samsung Electronics Vice Chairman Lee Jae-yong enters the Seoul Central District Court in Seocho-gu, Seoul, to hear his verdict Friday. (Yonhap) Samsung Electronics Vice Chairman Lee Jae-yong enters the Seoul Central District Court in Seocho-gu, Seoul, to hear his verdict Friday. (Yonhap)

Lee, who has been detained since February, was found guilty of all five charges -- bribery, embezzlement, concealment of criminal proceeds, illegal transfer of assets overseas and perjury.

The court said Lee and Samsung executives offered large bribes to the president, who held “immense power and the ultimate authority,” and embezzled company funds, hid assets overseas and concealed profits from criminal acts in the process, all expecting a favor in the form of Samsung Group’s smooth leadership transition.

Lee is the first member of Samsung Group’s ownership family to be sentenced to jail. He is set to appeal the decision.

The special counsel claimed Samsung had offered 43.3 billion won ($38.3 million) in donations to three entities controlled by Choi and in sports sponsorships to Choi’s horse-riding daughter Chung Yoo-ra.

It saw the money as a bribe to win the government’s backing for a controversial 2015 merger of two Samsung affiliates -- Cheil Industries and Samsung C&T -- which was a crucial step for a smooth leadership transition from the ailing Samsung Chairman Lee Kun-hee to his only son Lee Jae-yong. The merger was opposed by many shareholders who viewed it as only serving to help Lee tighten his grip.

Former President Park, in return for the money, is suspected of having pressured the state-funded National Pension Service, the largest stakeholder in Samsung C&T, to vote in favor of the controversial merger, according to the counsel.

Prosecutors sought a 12-year jail sentence for Lee.

But the court acknowledged only part of the amount -- 1.6 billion won provided to a winter sports foundation and 7.3 billion won for Chung’s equestrian training -- as bribes. Donations worth 22 billion won to the K-Sports Foundation and Mir Foundation – to which other local firms also contributed money -- were not in return for favors, it said.

The court said Lee had been closely involved in making the money-for-political favors deal with the then-president. But it said Lee “passively” accepted Park’s requests for donations, rather than actively seeking favors.
Four former and incumbent Samsung Group executives, who stood trial along with Lee, were also jailed.

Choi Gee-sung, the former head of Samsung Group’s now-defunct control tower Corporate Strategy Office, and his deputy Chang Choong-ki were sentenced to four years in prison for their “heavy” involvement in implementing the bribery scheme. But they were not direct beneficiaries from it, the court said.

Former Samsung Electronics President Park Sang-jin received a three-year jail term, suspended for five years, and former Executive Vice President Hwang Sung-soo was sentenced to 2 1/2 years, suspended for four years.

Lee was immediately taken to the Seoul Detention Center,  south of Seoul, where he has already served nearly six months. Choi and Chang, who had been on trial without detention, will be taken behind bars.

“We cannot accept the verdict,” Lee’s lawyer Song Woo-chul told reporters following the ruling. “In the appeal, we are certain to have all charges proven not guilty.”  

Handcuffed and bound with rope around his black suit, Lee stepped out of the Justice Ministry’s bus at around 1:36 p.m. to hear his verdict at courtroom No. 417. As the verdict was delivered, he showed no particular reaction. The courtroom is the same where his father Lee Kun-hee received a suspended jail term for bribery and tax evasion in 2008.

Reflecting public interest, the room was filled with the accused’s family members, lawyers and reporters, as well as spectators. More than 450 people applied for just 30 seats in the 150-seat courtroom to witness what has been dubbed Korea’s “trial of the century.”

Lee denied all charges, saying the donations were made without his knowledge. He also said all key decisions from the controversial merger to the donations to the Choi-controlled entities had been signed off on by his mentor, former Samsung Group Vice Chairman Choi Gee-sung.

Samsung did not deny donating money to the Choi-controlled foundations, but the four executives said they had been forced to donate out of fear of what Park and Choi could do to their business.

The ruling is likely to deal a heavy blow to former President Park and her friend Choi, who are at the center of the corruption scandal that drove millions of Koreans into the streets last winter and eventually removed Park from office. They are on trial over charges of receiving bribes from local firms, including Samsung, with a ruling expected in October.

The court said Park and Choi had a close relationship and the ex-president helped Choi pursue personal interests through the bribery scheme involving Samsung Group.

“The ex-president conspired with Choi to actively and specifically ask for financial support through three one-one-one meetings from 2014 to 2016, and Lee met the demands in anticipation of Park’s help in the company’s leadership transfer,” the court said.

The ruling on Samsung’s heir apparent is widely seen as a sign of growing intolerance toward decadeslong corrupt ties between politicians and family-run conglomerates, or chaebol.

There had been pressure on the court to convict Lee, amid public anger in the face of the corruption scandal, which people believe symbolizes an unfair and unjust society that only benefits the most powerful in the country.
Chaebol owners have long gotten away with light or suspended sentences, with courts citing their contributions to the nation’s economy. Lee’s father also had his terms suspended and was set free through a presidential pardon. 

About 800 riot police were deployed around the court to prevent possible clashes between protesters present both in favor and against Lee’s verdict. They were gathering to either call for a heavier punishment or his release from prison. 

By Ock Hyun-ju (