Samsung heir pardoned due to South Korea’s economic needs

Samsung Electronics vice chairman Jay E. Lee was granted a presidential pardon on Friday for his role in the 2016 political scandal. According to the South Korean government, the move is necessary so that the country’s biggest pain can help stabilize the national economy.

“In an effort to overcome the economic crisis by revitalizing the economy, Samsung Electronics Vice Chairman Lee Jae-young… will be reinstated,” Korean ministries said in a joint press release, according to Bloomberg News.

Lee, 54, known in Korea as Lee Jae-young, was arrested in February 2017 for alleged involvement in Samsung paying millions in bribes to various entities associated with a presidential adviser in order to gain favor with an $8 billion merger between the two companies.. Divisions of the Samsung Group of Companies. In August 2017, Lee was found guilty of perjury, embezzlement, hiding assets outside the country, and being one of five Samsung executives who paid $6.4 million in bribes to former South Korean President Park Geun-hye.

The quick trial and fall from grace did not last long. Lee’s sentence was cut in half at an appeal hearing in February 2018, and key charges of bribery and embezzlement were “suspended”, allowing him to leave prison after just six months. A member of the National Assembly at the time said the decision “reaffirmed that Samsung is above the law and the courts.”

In early 2021, Lee’s appeals led to a new trial that resulted in him being sentenced to 30 months in prison. Lee was released on parole in August 2021 after serving 18 of 30 months. There are no such charges now.

Back to business as usual

While on parole, Lee was unable to formally take a job, although it was clear that he retained his status in the family business. In May, Lee, along with South Korean President Yoon Suk-yeol, organized President Biden’s tour of Samsung’s chip manufacturing plant. Bloomberg reported that Lee received reports about Samsung’s business, even if he could not respond to them.

What this pardon can do, besides stabilizing markets, is make Lee’s reign official. He was the de facto head of the company after his father’s heart attack and hospitalization in 2014, but his criminal case prevented a real transition after Lee Kun Hee’s death in 2020. Lee Kun-hee was also widely pardoned by South Korea, never formally arrested or served a prison sentence for bribery, tax evasion and breach of trust in 1996 and 2009. The post of chairman of the board of Samsung remained vacant after the death of Lee Kun-hee.

With his own pardon, Lee could officially take over the reins at Samsung – if he can also sidestep separate allegations related to the merger of Samsung’s subsidiaries.

Also this week, Shin Dong-bin, chairman of Lotte Group, South Korea’s fifth-largest family conglomerate, was pardoned. This pardon was also clearly aimed at protecting the economy from inflation, supply chain crises and global tensions.

“Due to the urgent need to overcome the national economic crisis, we have carefully selected economic leaders who lead the engine of national growth through active investment in technology and the creation of jobs that will be pardoned,” Justice Minister Han Dong-hun said, according to CNBC.

One of Li’s first projects could be the completion of a $17 billion chip manufacturing plant that Samsung wants to build in Taylor, Texas, using ample US funding available for domestic chip production. Analysts also expect Samsung to act faster and more decisively in research, acquisitions and broader strategies.

“I am deeply grateful for the opportunity to start over,” Lee said in a statement following his pardon. “I will work hard to fulfill my responsibilities as an entrepreneur.”