Samsung Heir Joins Chaebol Shame List With Bribery Conviction
(Bloomberg) -- The conviction of Jay Y. Lee, heir apparent at Samsung, has seen the 49-year-old join a lengthy list of executives from South Korea’s chaebol to run afoul of the law.
It’s a list that includes his father, along with men behind conglomerates including Hyundai, SK and Hanwha.
Lee was convicted of bribery, perjury and embezzlement and handed a five-year prison sentence after a six-month trial for his role in a scandal that helped bring down former President Park Geun-hye. The vice chairman of Samsung Electronics Co. was accused of paying bribes to a confidante of the then-South Korean leader to get government backing for a merger of affiliates that tightened his grip on the smartphone maker. He has consistently denied wrongdoing and his lawyers said he would appeal.
While in the past convicted executives were often pardoned, the new administration of President Moon Jae-in was swept into power on pledges to reshape the country to benefit individual Koreans. That includes higher taxes and regulation of the chaebol that dominate the nation’s corporate landscape.
While Samsung Electronics and other companies in the conglomerate have their own management teams who take care of day-to-day operations, Lee has served as de facto head of the chaebol since his father was hospitalized in 2014 after a heart attack. The Lee family controls Samsung through a web of cross-shareholdings.
Since Lee’s arrest and detention in February, Samsung Electronics shares have reached an all-time high and its earnings have risen to a record.
Here are some notable chaebol cases:
- Lee Kun-hee, Samsung Group chairman and Jay Y.’s father, was convicted twice. In 2008 it was for tax evasion and he was given a suspended three-year prison sentence before later being pardoned by President Lee Myung-bak. That followed a 1996 conviction for bribing ex-President Roh Tae-woo that resulted in a two-year suspended prison sentence and subsequent pardon.
- Chung Mong-koo, Hyundai Motor Group chairman, was convicted of embezzlement and breach of duty in 2007. He was given a suspended three-year prison term after promising to make a donation to charity of 1 trillion won, which was worth $1 billion at the time. Chung was also pardoned by Lee Myung-bak.
- Chey Tae-won, SK Group chairman, was jailed twice. He was sentenced to four years in prison in 2013 for embezzling corporate funds but was pardoned in 2015 by Park Geun-hye. In 2003, he was sentenced to three years in jail before he was pardoned in 2008.
- Lee Jay-hyun, CJ Group chairman, was convicted in 2014 of embezzlement, breach of fiduciary duty and tax evasion before eventually being sentenced to two-and-a-half years in jail. Lee, who is Jay Y.’s cousin, has been in and out of jail during that period because of complications stemming from a kidney transplant in 2013. President Park Geun-hye pardoned Lee in August 2016.
- Kim Seung-youn, Hanwha Group chairman, was convicted of embezzlement in 2012, for which he was sentenced to four years jail, and also for assault in which he received an 18-month sentence in 2007. Both sentences were suspended. He received a pardon for his assault conviction from Lee Myung-bak in 2008.