South Korea pardons Samsung boss to ‘counter economic crisis’

Issued on: 12/08/2022 – 10:08

Billionaire Lee Jae-yong, convicted of bribery and embezzlement in January last year, will be “reinstated” to give him a chance to “contribute to overcoming the economic crisis” of the country, justice minister Han Dong-hoon said.

Lee — who has a net worth of $7.9 billion, according to Forbes — was released on parole in August 2021, after serving 18 months in jail, just over half of his original sentence.

Friday’s pardon will allow him to fully return to work by lifting a post-prison employment restriction that had been set for five years. 

“Due to the global economic crisis, the dynamism and vitality of the national economy have deteriorated, and the economic slump is feared to be prolonged,” the Justice Ministry said in a statement.

The pardon was given so that Lee — as well as other high-level executives receiving pardons Friday — could “lead the country’s continuous growth engine through active investment in technology and job creation”, it added.

Three other high-profile businessmen were also pardoned, including Lotte Group chairman Shin Dong-bin, who was sentenced to a suspended two-and-half-year prison term in a bribery case in 2018.

A total of 1,693 people — including prisoners with terminal illnesses and those near the end of their terms — were on the pardon list, the ministry said, ahead of the annual Liberation Day anniversary Monday.

The anniversary marks Japan’s 1945 World War II surrender, which liberated Korea from decades of colonial rule and is typically celebrated each year with the pardon of hundreds of prisoners.

Lee, 54, issued a statement after the pardon was announced saying he aimed to “contribute to the economy through continuous investment and job creation for young people”.

Above the law?

Lee is the vice-chairman of Samsung Electronics, the world’s biggest smartphone maker. The conglomerate’s overall turnover is equivalent to about one-fifth of South Korea’s gross domestic product.

He was jailed for offences connected to a massive corruption scandal that brought down former president Park Geun-hye.

There is a long history of South Korean tycoons being charged with bribery, embezzlement, tax evasion or other offences.

But many of those convicted have subsequently had their sentences cut or suspended on appeal, with some — including late Samsung chairman Lee Kun-hee, who was convicted twice — receiving presidential pardons in recognition of their “contribution to the national economy”.

The giant Samsung group is by far the largest of the family-controlled empires known as chaebol that dominate business in South Korea.

President Yoon Suk-yeol said Friday that the pardons were aimed at improving the lot of “ordinary people who have been affected by the prolonged Covid-19 pandemic”.

But analysts said they simply allowed major businessmen to feel they were not “constrained by any legal norms”, Vladimir Tikhonov, professor of Korean studies at the University of Oslo, told AFP.

Former conservative president Lee Myung-bak, who is currently serving a prison sentence over corruption and had initially been expected to benefit from the pardons, was not included on the list.

Justice minister Han said all politicians were excluded this time as the economy is the most “urgent and important” issue.

Local reports have speculated that pardoning Lee Myung-bak would have been too risky for President Yoon, who is already struggling with record-low approval ratings.

More legal woes

Lee Jae-yong still faces a separate trial over accusations of accounting fraud regarding a merger of two Samsung firms in 2015.

In May, he was excused from a hearing in that trial to host US President Joe Biden when he kicked off a tour of South Korea by visiting Samsung’s chip plant, alongside President Yoon.

His pardon follows Samsung unveiling a massive 450 trillion won ($346 billion) investment blueprint for the next five years, aimed at making it a leader in sectors from semiconductors to biologics and creating 80,000 new jobs.

But Lee’s imprisonment has been no barrier to the firm’s performance — it announced a surge of more than 70 percent in second-quarter profits in July last year, with a coronavirus-driven shift to remote work boosting demand for devices using its memory chips.

“Samsung operated perfectly well without any pardon,” Tikhonov told AFP.

“The pardon weakens rule of law, which potentially is, in fact, more detrimental than advantageous.”

(AFP)