The ruling of the South Korean court increases the possibility of Samsung's heir returning to jail

SEOUL: The Supreme Court of South Korea ruled on Thursday that a bribe case against the heir of the Samsung group it must be reviewed by a lower court, which increases the possibility of a harsher sentence and possible return to jail.

The Supreme Court revoked part of a bribery conviction of the appeals court against Samsung de facto boss Jay & Lee , who received a suspended sentence of two and a half years for seeking favor from the former leader of the country.

The Court said that the Seoul High Court interpretation of what constituted bribes for Samsung by then President Park Geun-hye was too narrow and returned the case to the appellate court.

The ruling of the court of appeals was based on the premise that the horses that the defendants gave to Choi Seo-won should not be considered bribes, misinterpreting the principle of the law on bribery and wrongly affecting the ruling, said the president of the court, Kim Myeong-su.

Choi is a confidant of the former president who was convicted of bribery and other charges and is serving a 20-year prison sentence.

The case against Lee centred on whether three horses donated by Samsung group for the training of the daughter of Choi, a competitive equestrian, should be considered bribes aimed at winning the President's favour in the conglomerate's succession planning.

The court revoked the part of the appeals court's decisions that declared him innocent. That means it is inevitable that he will receive a more severe sentence, said lawyer Choi Jin-nyoung, who is not involved in the case.

A sentence of more than three years would mean an immediate imprisonment since the suspension of the sentence is only allowed for periods of up to three years under the law of South Korea.

The court documents showed that Park asked Lee to help the daughter and was found guilty that the horses were bribes worth around 3.7 billion won ($ 3.05 million). However, the horses were not recognized as such in Lee's trial, which helped reduce his sentence.

The Supreme Court said, however the appeals court erred in not recognizing the horses as bribes given by Samsung to win favors.

Park was charged in 2017 after weeks of street protests demanding his removal for abuse of power and corruption.

The Supreme Court also ruled that the higher court made a mistake in its decision against park at procedural points, ordering a review. The review is unlikely to significantly alter the 25-year sentence you serve.

Crisis



The ruling casts doubt on whether Lee, 51, can focus on running the group's flagship Samsung Electronics Co Ltd through the fall in profitability and the reduction of Japanese exports of crucial materials for the world's leading chip maker.

Japan's decision last month to restrict exports of key chemicals for the manufacture of chips after a diplomatic dispute threatens to interrupt the production of memory chips, the largest export item in South Korea.

Lee has been on a high profile mission to address what he told his lieutenants that it was a crisis.

Officials at Samsung are concerned about what his absence would mean for key management strategies in a tougher business climate than when Lee was arrested in 2017, a person with direct knowledge of the matter told Reuters.

Lee, vice-chairman of Samsung Electronics , was sentenced in 2017 to five years imprisonment for bribing a friend of Park as he sought to succeed his father and strengthen control of Samsung group .

He was released after a year in detention when the Seoul High Court of Appeals reduced his sentence by half and suspended it for four years. Both Lee, who denies acting badly, and prosecutors appealed.

Speaking to reporters after the ruling, Lee's lawyer denied Samsung received any favors from Park and said any payment made by Samsung was in response to a demand from the now-deposed leader, an argument it had made in lower court trials.

The Supreme Court decision is regrettable in the sense that it found providing financial support at the demand of the President constituted a bribe, said Lee In-jae from Bae, Kim u0026 Lee that represents Jay & Lee and former Samsung executives.

The defendants are very sorry to have caused many disappointments and concerns for this matter, he said.

By close of trade on Thursday, shares in 12 out of the 15 listed Samsung group affiliates fell, with Samsung Electronics falling 1.7% and Samsung BioLogics Co Ltd plunging 4.9%, helping push the benchmark KOSPI down 0.4%.

Analysts said Jay & Lee's possible return to prison will have little impact on the performance of the chip giant.

Three professional chief executives run Samsung Electronics ' divisions of components, handsets and home appliances.

Park Jung-hoon, fund manager at HDC Asset Management which owns Samsung Electronics shares, said Lee's return to jail will have little impact on Samsung management or earnings, and could soon be entitled to a Presidential pardon, given economic difficulties Samsung and the country face.

The ruling could cause short-term market volatility, but it will ease the uncertainty about the three-year case, Park said.

After the Supreme Court's decision, Samsung Electronics said the company would "avoid a recurrence of past mistakes" and promised to continue to contribute the country's economy.

comments