Top court orders review of Samsung heir’s bribery case

August 29, 2019

 South Korea’s top court on Thursday ordered a lower court to reconsider its suspended jail sentence for Samsung heir Lee Jae-yong in a massive bribery scandal that led to the ouster of former President Park Geun-hye.

The de facto leader of the country’s top conglomerate was initially sentenced to five years in jail in 2017 for bribing a longtime friend of Park as he sought the government’s help in succeeding his father and securing control of Samsung Group.

He was freed a year later after the appeals court reduced the term to 2 1/2 years, suspended for four years, dismissing most of the bribery charges against him.

The Supreme Court, however, said Lee should also be found guilty of providing about 5 billion won (US$4.1 million) worth of bribes to the president’s friend Choi Soon-sil, charges excluded from the previous court ruling.

If Lee is sent back to prison following the appeals court’s review, it could deal a further blow to the country’s top conglomerate, which is already struggling with economic headwinds and business risks.

Samsung Electronics, the conglomerate’s key unit, has taken a hard hit from South Korea and Japan’s trade rift as Japan tightened the supply of key component exports to Korea.

In addition to external woes, the group is facing legal risks as the prosecution is probing Samsung BioLogics Co., over allegations that an accounting fraud at the biohealth unit could have been aimed at tightening Lee’s management control.

The Chief Justice Kim Myeong-su, who read out the sentence, said there had been a “misunderstanding of legal logic” and “lack of hearings” in the process, overturning part of the previous ruling.

Specifically, Kim said that the three horses, worth 3.4 billion won, that Samsung gifted to Choi should be considered as bribes. The earlier ruling had excluded them from bribery charges given that Samsung didn’t give Choi ownership of the horses.

The top judge also noted that Samsung’s 1.6 billion-won donation to a sports foundation run by the Choi family was a planned move relevant to Lee’s management succession from his hospitalized father Lee Kun-hee.

“Supreme Court ruling shows that the content or subject of bribery does not have to be detailed … there is sufficient room to acknowledge that the sports foundation donation is relevant to the president’s duty,” Kim said.

The latest ruling more than doubled the amount of Lee’s alleged bribes to 8.6 billion from 3.6 billion won. The lower court had only acknowledged the 3.6 billion won Samsung sent to Choi’s Germany-based firm as bribes.

This also indicates a potential leadership crisis for Samsung. Under local law, the court can only hand down a suspension of sentence when the embezzlement amount is less than 5 billion won.

Meanwhile, the Supreme Court also ordered the lower court to review cases involving the former president and her longtime friend Choi. They had been sentenced to 25 years and 20 years in jail, respectively.

In a rare move, Samsung released a statement on the verdict, apologizing for “causing deep concerns” and pledged “not to repeat past wrongdoings.”

It also asked for support, saying “We ask for your help and support so that Samsung can overcome crisis and contribute to the national economy amid growing economic uncertainties.”

Thursday’s ruling was broadcast live nationwide via TV and social media, reflecting a nationwide interest in the scandal that rocked the nation.

Tens of millions of people poured into the streets between October and December 2016 to hold candlelight vigils in protest of the massive corruption case.

Park was impeached by parliament in December 2016. The Constitutional Court upheld the impeachment decision in March 2017, permanently removing her from office a year before the scheduled end of her original five-year term.

The Moon Jae-in administration, often associated with the candlelight movement, has pledged to reform the country’s family-controlled conglomerates, which have been criticized for their excessive influence on politics.