Samsung imprisoned heir for embezzlement and bribery
Seoul / Hong Kong (CNN Business) – Samsung Vice President Lee Jae-yong will be back in prison, casting doubt on the tech giant’s future leadership.
On Monday, the Seoul High Court in South Korea sentenced Lee to two and a half years in prison after convicting him of embezzlement and bribery. He was arrested after sentencing.
It’s the latest development in the controversy that has followed Samsung for years. Lee, also known as Jae Wai Lee, was involved in a massive power trading scandal that brought down the government of former South Korean President Park Geun-hee. Park herself will spend two decades in prison over the case.
Meanwhile, Lee was convicted of other bribery and corruption charges in 2017 and sentenced to five years in prison at the time. But he was released less than a year later, when the appeals court dropped some of the charges and suspended the verdict.
A critical moment for Samsung
This latest ruling is the result of a new trial ordered by the country’s Supreme Court.
Lee’s return to prison comes at a critical time for Samsung. His father, Lee Kun-hee, president of the company, passed away last year. Lee’s father has been in a coma since he had a heart attack in 2014, but he remains the current head of the company. His son was serving as the de facto leader of Samsung.
Samsung declined to comment on the ruling, citing a statement issued by Lee’s lawyer.
“This case is, in essence, a violation of the company’s rights to freedom and ownership by the former president who abused her power,” said lawyer Engai Lee, who is leading the defense team of the company’s vice president. “I find the court’s decision regrettable.”
However, shares of the company declined in Seoul after the announcement. Samsung shares are down nearly 3.8%.
He could appeal to me if he wished, although it wasn’t immediately clear if he intended to do so.
Lee’s legal troubles aren’t over yet. He faces a separate lawsuit over a controversial 2015 merger that helped him tighten his grip on the company. Eleven Samsung executives, including Lee, were indicted last year on charges that include illegal dealings, stock manipulation and perjury.
This case is still pending.