Major Impact on the Company’s Near-Term Future
Lee was initially sentenced to a five-year jail term for bribing an associate of former President Park Geun-hye in 2017. He only served a year in prison as the sentence was reduced and suspended on appeal.
However, the Seoul High Court ruled again today to return Lee to serve an additional 18 months in jail as the year he already served in detention is expected to count.
Lee has a right to appeal again; however, the chances of the sentence being overturned are slim as the Supreme Court has already ruled on the case once. After the verdict was given today, Lee was immediately taken into custody.
“In a case sent back by the Supreme Court, there is a narrower range of options for the judges’ bench... but it’s also true that the Supreme Court can’t really touch the final court’s sentencing,” said a lawyer Rha Seung-chul.
According to court documents, Lee bribed the aid of the former President Park Geun-hye and her friend Choi Soon-sil with ₩29.8 billion ($27.4 million) worth of bribes. He did this to get government backing for a smooth transfer of power at Samsung Group.
“In this case, a company’s freedom and right to wealth were violated due to the abuse of power by the former president,” Lee’s lead attorney said in a statement given by Samsung Electronics.
Jay Lee is the oldest child of Lee Kun-hee, who served as chairman of the Samsung Group from 1987 to 2008 and from 2010 until he passed away in October of last year. Kun-hee is credited with transforming the business into one of the world’s most powerful tech companies.
Investors fear that Lee’s absence will have a major impact on Lee Kun-hee’s inheritance process. This process is crucial for the Lee family to keep control of the company.
Shares of Samsung Electronics plunged 3.41% after tumbling more than 4% earlier in the session. Other Samsung-related stocks fell between 2.7% and 6.8% on Monday.
Shares of Samsung-related shares fell on Monday after Samsung heir Jay Lee was sentenced to 30 months in jail for bribery by a South Korean court.
About the Author
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.