Lee Jae-yong, the acting chairman of Samsung and the heir to the billion dollar conglomerate has been held guilty of corruption by a court in South Korea.
The billionaire has been sentenced to five years in jail.
The Samsung Group is one of the biggest multinational conglomerates in the world. Headquartered in Seoul, South Korea, Samsung was started by Lee Byung-chul in 1938 as a trading company. Over the years it expanded and diversified into numerous affiliated businesses. The Samsung Electronics is the world’s 2nd largest information technology company.
Lee Jae-yong, who is also called Jay Y Lee is the de facto head of the Samsung empire. The scandal that got him arraigned is connected to the case that brought down South Korea's former President Park Geun-hye. She had been impeached in 2016 on charges related to corruption. Details emerged that her close aide and friend Choi Soon-sil had received gifts in exchange for influence in the government. In June 2017, she was jailed for corruption. She will reportedly serve three years. The former President has maintained her innocence.
Lee Jae-yong has been accused of donating $36m to a not-for-profit organization run by Choi Soon-sil in exchange for political favors. Jae-yong had also given money and a horse to Soon-sil’s daughter. However, Jae-yong has said that he did not ask for political favors for these gifts. In addition, his defense team has maintained that he wasn’t aware of the money that was given to Soon-sil’s organization. They noted that the money was signed off without his knowledge.
The trial has gripped the South Korean nation as citizens have become increasingly angry about Samsung’s alleged actions in the scandals. It has been deemed the “trial of the century.”
Jae-yong did not express any emotion as the verdict was read. However, his lawyers have announced that they will be repealing the decision. Samsung attorney Song Woo-cheo told reporters outside the court, “As a lawyer I cannot possibly agree with the juridical decisions and acknowledged facts involved in the verdict. We will appeal against the decision and I am sure that in the appellate trial all the charges will be dismissed.”
Choi Gee-sung and Chang Choong-ki are two other employees from Samsung who have been held guilty in the same trial. According to the BBC, in the past when conglomerates or top businessmen have been held guilty of similar charges, they have received Presidential pardons. Moon Jae-in, the current President of South Korea has already signaled that it would not be the case this time.
Our assessment is that this verdict and the ensuing scandal can cast a deep shadow in Samsung’s legacy. The company’s revenues have continued to rise across the globe. However, with the heir-apparent jailed for corruption, the brand may be tainted. This controversy could bring down other top businesses in the country.