Vice Chairman Lee Sinks Down with a Sigh After Verdict... Samsung Executives Also 'Disheartened'
Economic Groups Express Concern Over Leadership Void Impacting Samsung and Korean Economy
Foreign Media Report Vice Chairman Lee's Detention News
[Asia Economy Reporter Ki-min Lee] Samsung Electronics Vice Chairman Lee Jae-yong was sentenced to 2 years and 6 months in prison in the retrial of the National Pension Service corruption case and was re-incarcerated, bringing a blizzard of uncertainty to Samsung. Employees of Samsung affiliates fell into 'panic,' and not only economic organizations but also foreign media expressed concerns about the leadership vacuum at Samsung.
According to the business community on the 18th, before the verdict, presidents and employees of Samsung affiliates waited tensely in their offices for Vice Chairman Lee's sentencing trial. A Samsung employee said about the atmosphere in the company that morning, "Now that Chairman Lee Kun-hee has passed away, Vice Chairman Lee is the 'center of gravity' for the company," adding, "Since the company's fate is at stake, employees have been anxiously awaiting the trial results since morning." Some still held onto hopes for a suspended sentence, as Vice Chairman Lee had established and operated the Samsung Compliance Committee according to the court's orders and pledged to maintain its effectiveness and sustainability.
Vice Chairman Lee arrived at the Seoul High Court with a stern expression around 1:42 p.m. When asked if he had given any instructions to the group in preparation for any situation, he remained silent and headed to the 312th courtroom. Upon arriving at the courtroom, Vice Chairman Lee briefly closed his eyes before the sentencing by the Seoul High Court Criminal Division 1 (Presiding Judge Jung Jun-young).
Vice Chairman Lee was sentenced to prison in the retrial sentencing trial that began at 2:05 p.m. that day and was re-incarcerated after 1,078 days. Although the court gave him an opportunity to speak before detention, he replied firmly, "I have nothing to say." After the court left, Vice Chairman Lee sat down weakly, sighed, exchanged a few words with his legal team, and was then taken into custody in the courtroom.
Vice Chairman Lee was sentenced to 5 years in prison and detained after the first trial of this case in 2017-2018, then received a sentence of 2 years and 6 months with a 4-year suspended sentence in the second trial and was released after 353 days. As the court left, sobbing sounds were heard from the gallery. Some spectators said, "Isn't the court being too harsh?" and "Stay strong, Vice Chairman." Outside the courtroom, supporters and opponents shouted competing slogans of "Not guilty" and "Guilty" regarding Vice Chairman Lee.
Lee In-jae, Vice Chairman Lee's attorney from the law firm Bae, Kim & Lee LLC, commented on the prison sentence, stating, "The essence of this case is the former president's abuse of power, where the company’s freedom and property rights were infringed." Regarding the court's judgment denying the effectiveness of the Samsung Compliance Committee and the possibility of further appeal, the lawyer said, "We need to review the verdict to know for sure," withholding further comments. On the other hand, the special prosecution team led by Park Young-soo evaluated, "This sentencing reflects the Supreme Court's ruling," adding, "The verdict on the bribery case involving support for Jeong Yoo-ra's equestrian activities and the gifted center has been effectively concluded with the confirmed guilt of former President Park Geun-hye and Choi Seo-won (formerly Choi Soon-sil), the bribery recipients."
Samsung employees could not hide their feelings of emptiness. One employee said, "The court recognized Vice Chairman Lee's sincerity but did not acknowledge the effectiveness of the Compliance Committee," adding, "Colleagues who received the sentencing news via breaking news are also disappointed."
The Compliance Committee, which was a key issue in this trial, refrained from commenting on Vice Chairman Lee's detention, stating, "We are not in a position to comment." However, the committee added, "Regardless of the trial outcome, the Compliance Committee will continue to faithfully carry out its given role without wavering."
The business community expressed concerns that the remaining 1 year and 6 months of Vice Chairman Lee's sentence could disrupt company management. The Korea Federation of SMEs stated, "The business community is deeply concerned that the recent ruling imposing a prison sentence has made the management vacuum at Samsung Group a reality," adding, "As a result of the management vacuum at a global company representing our country, delays in major business decisions and investments are inevitable, which is expected to have adverse effects on the overall economy and industry."
Samsung Electronics Vice Chairman Lee Jae-yong is attending the retrial sentencing hearing of the state affairs manipulation case held at the Seoul High Court in Seocho-gu, Seoul on the 18th. Photo by Hyunmin Kim kimhyun81@
The Federation of Korean Industries also expressed regret in a statement, saying, "Vice Chairman Lee has played a role in supporting the Korean economy by leading bold investments and job creation amid the economic crisis caused by COVID-19, and we deeply regret the detention ruling." The Korea Chamber of Commerce and Industry also expressed concerns about potential setbacks in Korea's economic growth due to the trial outcome.
Foreign media urgently reported on Vice Chairman Lee's re-incarceration. Bloomberg News stated, "A dramatic conclusion has been reached in the bribery trial that has lasted for years and sparked intense anger over collusion between politics and business," adding, "The top decision-maker of the world's largest electronics company has been imprisoned amid growing global uncertainty and rising competitors."
It further noted, "In a situation where uncertainties arising from US-China relations and intensified competition are exacerbated by the COVID-19 pandemic, the leadership position of the largest memory chip, smartphone, and consumer electronics company has become vacant," predicting, "Vice Chairman Lee's absence will halt or complicate Samsung Electronics' long-term strategic moves and large-scale investments." BBC also explained that this ruling would affect Vice Chairman Lee's role within Samsung Electronics.
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