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Biography
2017: Five years in prison on corruption charges
On August 25, 2017, Samsung Electronics Vice President Lee Jae-yong, a de facto company executive and heir to the Samsung Group empire, was sentenced to five years in prison in a corruption case.
In February 2017, Lee Jae-yong was arrested on suspicion of involvement in a high-profile corruption scandal in the highest echelons of South Korean power.
Prosecutors said that Lee Jae-yong handed over or promised to transfer bribes totaling 43 billion won (36.3 million) dollars to the girlfriend of former President Park Geun-hye - Choi Soon-sil, for which in exchange he received support from the merger states of two Samsung subsidiaries in 2015. This deal allowed Li Jae-yong to strengthen his control over the entire Samsung group of companies.
In particular, the court believes that he allocated $6.38 million for equipment and equestrian training for the daughter of a close friend of the ex-president.
The defendant admitted only the fact of a voluntary donation to the president's girlfriend. Prosecutors demanded 12 years in prison, but the court stopped at five years.
 | We are confident that the decision will be canceled, - said the representative of the defense. |  |
The top manager's lawyers intend to appeal this court decision.
It is worth noting that the corruption case of bribery led to the impeachment of South Korean President Park Geun-hye. An investigation is underway against her and her friend Choi Sun Sil by August 25, 2017. The election of the new president took place on May 9, it was Moon Jae-in.
Bloomberg reports that four more former top managers of the company were found guilty at the same time as Lee Jae-yong. Among them - the ex-head of the corporate strategy division Choi Gee-sung and the former president of Chiang Chung Ki (Chang Choong-ki). They were sentenced to four years in prison, two more received suspended sentences.[1]
2020: Apology for corruption after leaving prison
In early May 2020, Samsung Electronics Vice President Lee Jae-young, the de facto head of the company and heir to the Samsung Group conglomerate, apologized for corruption and improper management of the company.
According to the South China Morning Post, Lee Jae-young was released from prison a year after being imprisoned on appeal, but a retrial awaits him. But before him, Lee Jae-young issued a public apology for the company's behavior and said that the company guarantees the rights of workers.
| | Our technologies and products have become a global brand, but the public still condemns Samsung's working methods, "said Lee Jae-young. "That's my mistake. I apologize. | |
Lee Jae-young has vowed to disrupt the traditional legacy executive appointment system. "I will make sure there is no more debate over leadership continuity. I will no longer take any action that is against the law. "
It is known that the vice president apologized at the request of the Samsung Group Compliance Committee, which monitors the transparency of corporate relations within the firm. That committee was set up under a court order after a serious corruption case that put Lee Jae-young behind bars.
The committee noted that many "disgraceful" incidents involving Samsung were related to Lee's alleged succession scheme and advised the vice president to publicly apologize. It also recommended Lee confirm a rejection of Samsung's "no-union" policy, which the company followed for nearly 50 years until November 2019.
| | I sincerely apologize to everyone affected by Samsung's union policies, "Lee Jae-young said. | |
He added that the company will guarantee the rights of workers and act in accordance with employment rules.[2]
2021
2.5 years in prison for corruption
On January 18, 2021, Samsung Electronics Vice President Lee Jae-yong, who is the de facto head of the Samsung Group conglomerate, was sentenced to 2.5 years in prison for corruption.
The corresponding verdict was made by the Seoul court. He found Lee Jae-yong guilty of taking bribes and embezzlement of about 8.7 billion won ($7.8 million) in connection with the scandal that ousted the country's first female president, Park Geun-hye.
As part of the same trial, the head of Samsung was previously sentenced to five years in prison, but spent about a year there and was released after an appeal. The Supreme Court later sent the case back to the Seoul High Court.
New charges against Li Jae-yong were brought despite the fact that earlier a public commission recommended that the prosecutor's office drop all charges against the entrepreneur and stop investigating the circumstances of the transition of power to Samsung Group.
In September 2020, prosecutors indicted Lee Jae-yong in the 2015 merger of Cheil Industries and Samsung C&T. As a result of the deal, Li Jae-yong gained sole control of the conglomerate. He and ten other current and former senior employees of the corporation are accused of stock manipulation, violation of laws governing stock market operations, violation of audit rules and fraud with accounting.
The defense of Li Zhe Yong denied these accusations, calling the opinion of the prosecutor's office unfair. The lawyers also said that the defendants would "participate in good faith" in the trial.
After the verdict was announced on January 18, 2021, the vice president of Samsung Electronics was taken into custody in the courtroom. He refused to say anything in his last word, which the judge provided him.[3]
Parole exemption
In early August 2021, it became known that the head of the South Korean company Samsung Lee Jae-young, accused of bribes, would be released from prison on August 13. Lee served 18 months of a 30-month prison sentence for bribing former South Korean President Park Geun-hye.
Lee was involved in a huge corruption scandal that collapsed Park Geun-hye's government in 2016. Pak himself was sentenced to 20 years in prison and a fine of 18 billion won ($16 million).
Lee initially served one year of his five-year sentence in 2017, which was later suspended. The court's decision was then overturned and the prison sentence reduced. Lee was sent to prison again in January 2021.
| | Samsung Electronics [head] parole decision... was the result of a comprehensive analysis of various factors, such as public opinion and good conduct during detention, South Korea's justice ministry said in a statement. | |
Lee was among 810 other prisoners granted parole on the occasion of the country's Liberation Day, marking Korea's liberation from Japanese imperial rule in 1945. More than 600 prisoners were released on Liberation Day in 2020.
The Federation of Korean Industry, a big business lobby, welcomed Lee's parole decision.
| | If we cannot speed up the investment hours, we will quickly fall behind global companies such as Intel and TSMC, and then at any time we can lose control of the Korean economy, they said. | |
Lee still needs the justice secretary to approve his return to work, as the law prohibits convicted individuals from working for companies linked to that judicial investigation for five years.[4]
Guilty plea in court on drug-trafficking charges
In mid-October 2021, Lee Jae-young pleaded guilty in court to charges of illegal use of narcotic drugs. Legal challenges continue to haunt Samsung's de facto head even after his parole in August 2021 following a bribery charge.
On October 12, 2021, in the Seoul Central District Court, during a short first hearing, Lee said that from 2015 to 2020, he received propofol 41 times, a sedative used for anesthesia. He also noted that he had not used the drug since his release in August 2021.
| | This addiction arose with treatment, but I am deeply remorseful. I... I will do everything possible to prevent this from happening again, "said Lee Jae-yong. | |
Lee Jae-young initially sought treatment due to psychological pressure following his father's hospitalization in 2014, which intensified with a subsequent corruption scandal and trial leading to his conviction in January 2021, his lawyer said.
Prosecutors are demanding a fine of $58 thousand and an additional fee of $14 thousand. The decision will be made on October 26, 2021. Under South Korean law, the recipient of a controlled substance believed to have been administered illegally is subject to prosecution, as are those who imported the drug. Employees of the clinic in which the South Korean businessman received a sedative, who are tried separately, deny their guilt.
Prosecutors first became aware of the case in 2020, but in March 2021, an independent commission considering prosecutorial checks recommended that the investigation be terminated. They continued to seek a fine until June 2021, until another police report on the use of a sedative forced the court to order a hearing. Because propofol is less likely to be abused than many other controlled substances, many similar cases of illegal use have resulted in fines rather than direct prison terms.[5]
2022
Pardon in bribery case
On April 12, 2022, Vice President and de facto head Samsung Lee Jae-young received a pardon South Korea from President Yoon Suk-yeol, clearing him of criminal records for the massive corruption scandal that sparked nationwide protests in 2017 and revitalizing a crucial player in the South Korean economy.
The pardon is largely symbolic as Lee has already walked out on parole, serving 18 months in prison for bribery in a scandal that led to mass protests and removed then-President Park Geun-hye from power in 2017.
The pardon allows Lee to formally return to running the manufacturing conglomerate, lifting a five-year work ban that was part of his sentencing, and could portend major investment from Samsung, known for a wide range of consumer electronics, semiconductors and other products, according to analysts.
| | Given the urgent need to overcome the national economic crisis, we have carefully chosen to pardon economic leaders who act as an engine of national growth thanks to active investment in technology and job creation, said Minister of Justice Khan Dong Hun at a briefing. | |
| | In an attempt to emerge from the economic crisis by reviving the economy, Samsung Electronics Vice Chairman Lee Jae-young, whose suspended prison sentence ended recently, will be reinstated, the South Korean government said in a statement. | |
The move has been backed by many business leaders and the general public who believe its release will give the economy a competitive boost. More than three-quarters of South Korea's population supported the pardon, the poll found.
| | I am deeply grateful for the opportunity to start a new life, "Lee said in a statement after the pardon was announced. I will work hard to fulfill my obligation as an entrepreneur, "he said. | |
However, according to experts, Lee will now be able to run the company more actively, however, his trial continues and he risks going to prison again if convicted of fraud and stock manipulation.
Yoon also pardoned Lotte Group board chairman Sin Dong-bin, who was sentenced to two and a half years in prison for bribery also linked to Pak. The Lotte report notes that Sin will also contribute to "overcoming the complex global crisis."[6]
Appointment as head of Samsung Electronics
At the end of October 2022, the grandson of the founder of the South Korean conglomerate Samsung Electronics, Lee Jae-young, officially headed Samsung Electronics, his candidacy was approved by the company's board of directors.
Lee Jae-young said it was "time to embrace bolder challenges," and he made the company's survival dependent on the technology of the future.
| | We can turn this crisis into an opportunity... I will be at the forefront of a campaign to make Samsung a greater company that consumers around the world love - a message Lee Jae-young posted on the company's internal forum after being promoted. | |
Lee Jae-young already actually headed Samsung Electronics, but did not officially take office, as he was involved in a criminal bribery case and received two and a half years in prison.
Lee Jae-young was serving a prison sentence for bribing former South Korean President Park Geun-hye. He was released early, the President of South Korea signed a decree on his pardon, after which Lee Jae-young fully regained his rights.
On October 27, 2022, Samsung Electronics announced the appointment of Lee Jae-young as executive chairman of the board, officially elevating the heir apparent and long-term de facto leader of the South Korean tech and industrial giant, less than 15 months after his release from prison for bribery.
Lee has been running the conglomerate since a heart attack disabled his father, Lee Kun-hee, in 2014. Lee Kun-hee, who turned Samsung Electronics into a global giant, died in 2020 and Lee Jae-young is his only son.
Forbes estimates Mr. Lee Jae-young's fortune at $7.2 billion, making him the second richest person in South Korea. In a brief statement, company officials said the board approved Mr Lee's appointment, which was recommended by chairman Khan-Jo Kim.[7]
Notes
- ↑ Samsung Heir Sentenced to Five Years for Graft Conviction
- ↑ Samsung heir apologises over corruption scandal, union busting
- ↑ Samsung's Lee receives 30-month prison term in bribery trial
- ↑ Samsung boss to be freed from jail after bribery sentence
- ↑ Samsung chief Jay Y Lee pleads guilty to use of illegal substance
- ↑ South Korea's Yoon pardons Samsung's Jay Y. Lee to counter 'economic crisis'
- ↑ Samsung Heir Elevated to Chairman After Jail Stint
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