- Samsung heir served 18 months in prison for bribery
- Businessmen were convicted in a scandal that brought down a president
- South Korea says leaders must help overcome economic crisis
- Samsung may increase investment with Lee’s pardon, analysts say
SEOUL, Aug 12 (Reuters) – South Korean President Yoon Suk-yeol pardoned Samsung Electronics ( 005930.KS ) Vice Chairman Jay Lee on Friday, with the justice ministry saying the business leader was needed to help for overcoming a “national economic crisis”.
The pardon is largely symbolic, with Lee already on parole after serving 18 months in prison for bribery in a scandal that led to mass protests and toppled then-President Park Geun-hye in 2017.
But analysts said the pardon should mean Lee will be able to carry out business activities with fewer legal restrictions and could herald some major investment from Samsung, the world’s biggest maker of smartphones and memory chips.
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“With urgent needs to overcome the national economic crisis, we have carefully selected economic leaders who lead the national growth engine through active technology investment and job creation to be pardoned,” Justice Minister Han Dong-hun said at a briefing.
Technology- and export-dependent South Korea, Asia’s fourth-largest economy, is grappling with rising inflation, weakening demand, poor sentiment and a slowdown in spending. Read more
Lee, the heir to Samsung’s founding family, welcomed the decision and promised to work hard for the national economy “with continuous investment and job creation.”
Also pardoned by pro-business Yoon was Lotte Group Chairman Shin Dong-bin, who was sentenced to two and a half years in prison on bribery charges also linked to Park.
In a statement, Lotte said Shin would also help “overcome the complex global crisis.”
POLITICAL CRIMES
Park herself was pardoned late last year by her successor, liberal President Moon Jae-in, who struggled to fulfill his campaign promises to clean up business and politics.
A survey conducted last month jointly by four pollsters showed that 77 percent of respondents supported pardoning the Samsung leader, despite earlier protests.
“(This support) is obviously due to the current economic situation, but people also seem to have felt in part that Lee was somewhat in a position where he could not shake off the pressure from the former administration,” said Eom Kyeong-young, political commentator based in Seoul.
While business groups, including the Korea Chamber of Commerce and Industry and the Korea Federation of Enterprises, welcomed Lee’s pardon, civil rights groups criticized Yoon’s businessmen’s pardons.
Samsung Electronics Vice Chairman Jay Lee leaves a court in Seoul, South Korea, August 12, 2022. Yonhap via REUTERS
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“The Yoon Suk-yeol administration … is ultimately just aiming for a country only for the rich,” People’s Solidarity for Participatory Democracy said in a statement.
Another jailed former president, Lee Myung-bak, was expected to be pardoned after Yoon raised the possibility in June, but ended up not on the list. He was arrested in 2018 and sentenced to 17 years in prison for corruption, embezzlement and bribery.
BACK IN BUSINESS
Analysts have long awaited decisions on major projects and investments once Lee is reinstated, with company sources saying such decisions should be made by Lee alone.
“This removes the employment cap that Lee was technically under,” said Park Joo-gun, head of research firm Leaders Index.
“And projects that were pursued by Samsung, such as major mergers and acquisitions or investments, they could be tied to the pardon.”
Even before receiving the presidential pardon, Lee returned to the spotlight, appearing in May with President Yun and US President Joe Biden when they visited Samsung’s Pyeongtaek chip manufacturing facilities.
He also visited Europe in June to meet with ASML Holding NV ( ASML.AS ) Chief Executive Peter Wennink, discussing the adoption of key high-end chip equipment. Read more
Last November, Samsung decided on Taylor, Texas as the location for a new $17 billion chip plant. Read more
Samsung’s top executives hinted earlier this year about potential upcoming acquisition activity. Samsung Electronics hasn’t made a major deal since it completed its $8 billion purchase of audio electronics maker Harman in 2017.
Although macroeconomic factors such as falling demand may weigh on investment decisions, Samsung has huge military assets.
Samsung Electronics’ cash balance increased slightly to 125 trillion won ($95.13 billion) at the end of June from 111 trillion a year earlier.
Although experts say Lee can now participate more freely in governing, his legal troubles continue due to an ongoing trial in which he faces the risk of going back to prison if convicted on charges of fraud and stock manipulation .
Shares of Samsung Electronics closed up 0.5 percent, compared with a 0.2 percent rise in the benchmark KOSPI (.KS11). Shares of Lotte Corp (004990.KS) fell 0.6%.
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Reporting by Joyce Lee, Soo-hyang Choi, Heekyong Yang; Edit by Lincoln Feast
Our standards: The Thomson Reuters Trust Principles.
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