SEOUL (Reuters) – A South Korean court has sentenced Samsung Electronics Vice Chairman Jay Y. Lee to two and a half years in prison, the court said Monday, which will have major implications for his leadership of the technology giant and the positions of Korea. towards large companies.
With this, Lee is temporarily sidelined in the major decision-making at Samsung Electronics because it strives to overtake competitors. He will also not be able to oversee the inheritance process of his father, who died in October, crucial to maintaining control of Samsung.
Lee, 52, was convicted of bribing an employee of former President Park Geun-hye and jailed for five years in 2017. He denied wrongdoing, the sentence was reduced and suspended on appeal, and he was released after serving a year.
The Supreme Court then returned the case to the Seoul Supreme Court, which issued Monday’s ruling.
The Seoul Supreme Court has found Lee guilty of bribery, embezzlement and concealment of criminal proceeds worth approximately 8.6 billion won ($ 7.8 million), and said the independent compliance committee that Samsung established early last year has not yet is in full effect.
“(Lee) has shown willingness for management with increased compliance recently as he has vowed to create a transparent company,” said Judge Judge Jeong Jun-yeong.
“Despite some shortcomings… I hope over time it will be evaluated as a milestone in Korean corporate history as a start of compliance ethics for a bigger leap forward,” he said.
Lee, dressed in a dark coat and silver tie, stood ready to hear the conviction and sat down after it was read.
“The nature of this case is the former president’s abuse of power, which violates the freedom and property rights of companies. Given that nature, the court’s decision is regrettable, ”Lee’s attorney, Lee In-jae, told reporters.
With Lee returning to prison, the year he was already in custody is expected to count towards the sentence – leaving 18 months of his sentence.
Monday’s conviction can be appealed to the Supreme Court within seven days, the judge said, but legal experts said that because the Supreme Court has already ruled on it once, it is less likely to change its legal interpretation.
Shares of Samsung Electronics fell by no less than 4% after the ruling, while shares in affiliated companies such as Samsung C&T, Samsung Life Insurance and Samsung SDI also fell sharply.
Reporting by Joyce Lee; additional reporting by Choonsik Yoo. Editing by Gerry Doyle