Imprisoned Samsung Heir Faces (Some) Consequences
What's Actually Changing for the Samsung Heir?
If this headline sounds familiar, it’s because we’ve been covering the Samsung saga for years now. And while the story changes with each new scandal and revelation, the consequences for Samsung heir, Lee Jae-yong, remain roughly the same.
You may recall way back in 2017 that Lee was embroiled in a bribery scandal that eventually took down South Korea’s then-president Park and her entire government. Park is currently serving out her 25-year sentence. Lee was sentenced to a five-year jail term but was freed after serving a single year (if you count his detainment during his trial) in February 2018.
The Samsung heir’s freedom was based on an appeals court’s ruling that the gift of three horses valued around $2.8 million to the daughter of a friend of president Park did not count as a bribe. This reduced his sentence and the appeals court ordered his release.
At the end of August 2019, South Korea’s Supreme Court ruled that the lower court did not correctly evaluate what constitutes a bribe and ordered a retrial of Lee’s bribery case.
The retrial stretched on through the start of the pandemic at the end of 2019, through Lee’s unrelated indictment (case still pending) in September 2020, through his father’s death in October 2020, all the way to January 2021. On the 18th, Lee was sentenced to 2.5 years in prison and was taken into custody.
Surprisingly, the Samsung heir stated he “humbly accepts” the court ruling and declined to appeal the case. It’s expected that he will serve closer to 1.5 years than the full 2.5. Considering that the prosecution sought a nine-year sentence, perhaps he decided to take this minimal jail time as a win.
So, Lee is in jail for at least a year. What does that mean for Samsung? Depending on who you ask, not much.
Yes, there is speculation that the South Korean conglomerate will be slower to act and unable to make long-term choices without Lee’s direction. We saw those same predictions back in 2017.
But don’t start wringing your hands for Samsung just yet. As we’ve discussed before, South Korean chaebols have a long history of being run behind bars. So far Lee’s term has only been notable because COVID policies prevented him from meeting with Samsung executives face-to-face for four weeks.
Even then Lee was able to send two tone-deaf messages to Samsung employees in January apologizing for “giving [them] this big burden” but urging them to “maintain their work.”
A few days after his quarantine ended in February, Lee was informed by the Ministry of Justice that he can’t be employed by Samsung. Bombshell, right? Nope.
Turns out, Lee resigned as Vice Chairman from the company’s board of directors between October 27th and October 29th in 2019. He’s apparently been been working without a salary since. Lee’s remaining titles such as “Samsung heir,” “de facto head of Samsung,” and “Crown Price of Samsung” are entirely (and obviously) symbolic.
Since Lee has been running Samsung without any official title for more than a year, it’s difficult to see how the employment restriction will actually be enforced. Even if it is, Lee could be awarded a waiver by the Ministry of Justice.
So far, the only consequence for Lee beyond his short-term imprisonment appears to be his projected removal as Chairman of the Samsung Foundation Board in March.