SAN JOSE, Calif. – A South Korean court sentenced the head of Samsung Group, Jay Y. Lee, to five years in prison. The decision is seen as a watershed for the country’s techno-political climate long dominated by large conglomerates, but it is not expected to immediately impact its surging and vast electronics businesses.
The sentence was the mandatory minimum for Lee, who was convicted along with four other Samsung executives of charges including bribery of the former South Korea president Park Geun-hye, according to a Korean newspaper report. It marks the first time a Samsung leader has been jailed, although Lee’s father and grandfather both faced court actions during their tenures running the group, it said.
Samsung’s attorneys called the verdicts unacceptable and are expected to appeal the decisions.
In recent years, public opinion has shifted away from the chaebols, loosely translated as “wealth clans,” said a Reuters report. Once seen as heroes rebuilding the country’s post-war economy, “they have more recently been criticized for holding back the economy and stifling small businesses and start-ups,” it said.
In an opinion article, one Bloomberg reporter said the sentence should be treated as a pivot point for South Korean business.
“Only by locking Lee up…and keeping him there for his full sentence, will the government and courts send a convincing message that corporate malfeasance will no longer be tolerated…Whenever he emerges from his cell, Samsung’s shareholders and managers shouldn't welcome him back into the corporate fold. That would strengthen the message that criminal behavior will no longer be tolerated in Korea’s business community,” he said.
The six-month trial has already shaken Samsung Group. It dismantled a strategy group which oversaw the group’s many divisions. Samsung executives Choi Gee-sung and Chang Choong-ki, who headed that strategy group, were each sentenced to four-year prison terms, the Korean newspaper reported.
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