Seoul court to rule on Samsung scion Lee in bribery trial (updated)

Samsung Fire & Marine Insurance

25/08/2017 05:16

* Prosecutors seek 12-year jail term on charges including 
bribery 
    * If found guilty, Lee may face longest jail time for 
chaebol heir 
    * Appeals likely to go to Supreme Court next year - experts 
    * Lee's extended absence could slow long-term strategic 
decisions 
 
 (Adds colour from outside court) 
    By Joyce Lee and Yuna Park 
    SEOUL, Aug 25 (Reuters) - A South Korean court will rule on 
Friday on corruption charges against Jay Y. Lee, the billionaire 
head of Samsung Group, after a six-month trial in a nationwide 
bribery scandal that triggered the dismissal from office of the 
country's president. 
    Lee, the 49-year-old heir to one of the world's biggest 
corporate empires, has been held since February on charges that 
he bribed then president Park Geun-hye to help secure control of 
a conglomerate that owns Samsung Electronics  005930.KS , the 
world's leading smartphone and chip maker, and has interests 
ranging from drugs and home appliances to insurance and hotels. 
    Prosecutors have demanded a 12-year jail sentence for Lee, 
who also faces charges of embezzlement and perjury - potentially 
the longest prison term given to a South Korean business leader. 
    The third-generation de facto head of the powerful Samsung 
Group, Lee has effectively directed operations since his father, 
Lee Kun-hee, was incapacitated by a heart attack in 2014. 
    Some investors worry that a conviction and long jail term 
could leave a leadership vacuum, with no one to make big 
decisions at Samsung, which has more than five dozen affiliate 
companies and assets of 363.2 trillion won ($322.13 billion). 
 urn:newsml:reuters.com:*:nL4N1L301R Its listed companies make up about 30 percent of 
the market value of South Korea's KOSPI  .KS11  stock index. 
    Whatever Friday's verdict, lawyers expect an appeal which 
could go all the way to the Supreme Court, with a final ruling 
probably next year.  urn:newsml:reuters.com:*:nL4N1KS06X 
    Prosecutors have said Samsung's contributions to two funds 
backed by Park aimed to secure government support for a merger 
of two of its affiliates to tighten Lee's grip on the 
conglomerate. Lee has denied wrongdoing, and his lawyers say the 
2015 merger was done on business merits. 
    Lee's trial has gripped the nation, and Friday's closed 
courtroom verdict will be witnessed mainly by lawyers and 
Samsung officials, as well as some 30 members of the public who 
won seats through a lottery.    
    Outside the Seoul Central District Court on Friday, hundreds 
of supporters of Lee and Park, mostly elderly, waved South 
Korean flags and shouted "Innocent! Release!" as they were 
watched on by teams of police, who parked police buses to shield 
the entrance of the court complex.  
        
    'TOO BIG TO JAIL' 
    Samsung, founded in 1938 by Lee's grandfather, is a 
household name in South Korea and a symbol of the country's 
dramatic rise from poverty following the 1950-53 Korean War. 
    But over the years, it has also come to epitomize the cosy 
ties between politicians and powerful family-controlled business 
groups - or chaebols - which have been implicated in a series of 
corruption scandals. 
    South Koreans, who once applauded the chaebols for 
catapulting the country into a global economic power, now 
criticize them for holding back the economy and squeezing 
smaller businesses. 
    Investors say shares in chaebol firms trade at lower prices 
than they would otherwise because of their opaque corporate 
governance - the so-called Korea discount. 
    "Chaebol leaders used to get the same sentencing every time, 
there was even a saying called the '3-5 law' - three years 
sentencing, five years probation," said Park Sangin, professor 
of economics at Seoul National University.  
    "If Lee receives a heavy sentence, it can be seen as the 
shattering of the 'too-big-to-jail' trend of the past." 
    Lee's father was convicted of tax evasion in 2009, and had a 
3-year sentence suspended, with judges citing his contribution 
to economic development and "patriotism through business 
enterprise from job creation". He was pardoned four months after 
the final ruling. 
    South Korea's new president, Moon Jae-in, who replaced the 
disgraced Park after a May 9 election, has pledged to rein in 
the chaebols, empower minority shareholders and end the practice 
of pardoning corporate tycoons convicted of white-collar crime. 
 urn:newsml:reuters.com:*:nL4N1IA634 
    The ruling is expected to affect the verdict in Park's own 
corruption trial, expected later this year, as prosecutors 
argued she and Lee took part in the same act of bribery. 
    Prosecutors have also indicted top Samsung executives over 
the bribery scandal, including Choi Gee-sung, who headed the 
corporate strategy office, dubbed the 'control tower'. It has 
since been disbanded, and Choi has resigned.  urn:newsml:reuters.com:*:nL3N1GD2F4 
    Experts were divided on how Friday's ruling might go, with 
some lawyers expecting Lee to be found innocent on the major 
charges, saying much of the evidence at trial appeared 
circumstantial. 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
With new sheriff in town, S.Korea big businesses duck for cover  
   urn:newsml:reuters.com:*:nL4N1IO182 
Samsung seeks to bury fiery past with Galaxy Note 8 launch    
 urn:newsml:reuters.com:*:nL4N1L94T5 
BREAKINGVIEWS-Samsung is worse off regardless of trial verdict   
  urn:newsml:reuters.com:*:nL4N1LA2KN 
If convicted, Samsung's Lee could be c/o Uijeongbu Prison    
 urn:newsml:reuters.com:*:nL4N1L85KD 
FACTBOX-Key figures in South Korea graft scandal     urn:newsml:reuters.com:*:nL3N1GL2MZ 
INSIGHT-How ties to an "equestrian princess" landed Samsung at 
center of a scandal     urn:newsml:reuters.com:*:nL4N1EB2S4 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Writing by Soyoung Kim; Editing by Ian Geoghegan, Robert 
Birsel) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: SAMSUNG LEE/