The 49-year old businessman is alleged to have made large donations to non-profit foundations that are under the control of South Korean businesswoman, Choi Soon-sil.
Choi Soon-sil, daughter of South Korean cult leader, Choi Tae-min.
Choi Soon-sil is known for being a close friend of former South Korean president, Park Geun-hye. It has been reported that Mr Lee himself has been funding Choi’s entities in exchange for political favours. In terms of Mr Lee's convictions, these range from bribery to embezzlement.
The businessman, also known as Jay Y Lee, has been suspected of giving $38m in bribes to four of Choi’s foundations. In return for this, Mr Lee offered Choi political advice and granted her exclusive access to confidential government documents.
According to Mr Lee’s prosecutors, it has been suspected that the main reason why the businessman donated in the first place was to acquire the sufficient government support in order to call for a radical restructuring of Samsung. This in turn would have meant that Mr Lee would have increased control over Samsung Electronics.
Despite this however, Mr Lee’s defence team had made the claim that the businessman generally had minimal involvement in the daily procedural running of Samsung.
They furthermore went onto make the assertion that the payments made to Choi’s foundations were signed off without the approval of Lee himself.
Song Wu-cheol, one of Mr Lee’s lawyers, said “we are confident that the ruling will be overturned”. However, the South Korean court was not convinced.
As a result of Lee’s prosecution, the public has displayed anger and frustration against the top South Korean companies, culturally referred to as chaebols.
Korea's top 4 conglomerates in the chaebols market.
In the past in South Korea, presidential pardons for the offences of a business leader were granted. This was due to the critical role that the leaders played in the country’s economy.
However South Korea’s new president, Moon Jae-in, has pledged to extensively clamp down on the country’s white collar crime offences once and for all.
Alongside Mr Lee in the same trial, two further Samsung executives Choi Gee-sung and Chang Choong-ki have also been sentenced to four years in prison.
Furthermore, Samsung’s former Electronics president Park Sang-jin and executive vice-president Hwang Sung-soo were granted with suspended sentences.
In terms of the implications of Mr Lee’s actions for the global reputation of Samsung, it has been reported that shares have fallen by 1% since the businessman’s prosecution.
The decision granted by the South-Korean court also places Mr Lee’s future plans to take over Samsung in the place of his ill father, chairman Lee Kun-hee, in jeopardy.
Sources – BBC News, The Guardian, The Financial Times
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