The Seoul High Court sentenced vice chairman Lee Jae-yong, also known as Jay Y. Lee, to 2 1/2 years behind bars on Monday after finding him guilty of embezzlement and bribery. Lee’s lawyer has called the decision “regrettable,” but it’s not yet clear whether he intends to appeal. The legal team representing Lee did not respond to a request for comment Wednesday.
Lee, meanwhile, has been the company’s de facto leader since his father fell into a coma in 2014. He died last year.
“These are decisions that involve tens of billions of dollars,” Kim added. “In Lee’s absence, Samsung will make conservative decisions in making risky investments.”
Samsung declined to comment for this story.
The appearance of a leader in prison is also a problem for Samsung, according to Jeff Dongwon Kim, deputy head of research at KB Securities, a Korean investment firm.
“Imagine the global business impact if [Apple CEO] Tim Cook was imprisoned for bribing the US government for millions of dollars,” KB’s Kim said, adding that investing firms have also become more socially conscious in recent years, and may wish to distance themselves from a company tainted by scandal.
Good for South Korea?
The verdict might ultimately have some positive effects, according to Chung Sun-sup who is the chief editor at Chaebol.com, a website that specializes in analyzing Korea’s family run conglomerates.
Lee’s father, the former chairman of Samsung, was convicted of bribery and tax evasion, but avoided prison and received presidential pardons. And other chaebol chiefs have been found guilty of criminal wrongdoing — only to be let off with light sentences and allowed to return to running their businesses.
Sending Lee back to prison might suggest that the country is willing to take the problem more seriously.
“This is the beginning of untangling the corrupt relationship between government and businesses,” Chung said. “It is a good thing for the Korean economy in the long term.”