The heir to the Samsung corporate empire was involved in a massive corruption scandal.
(Photo: dpa)
Tokyo South Korean President Yoon Suk Yeol pardoned the de facto head of electronics manufacturer Samsung, Lee Jae Yong, on Friday. The occasion is the anniversary of the country’s liberation from Japanese rule on August 15, 1945. In general, many people with petty crimes as well as business leaders and politicians mostly convicted of corruption have their sentences released. This year, in addition to the heirs of South Korea’s largest family conglomerate, 1,692 people are affected.
However, the reason for the pardon of the 54-year-old is a matter of state: Officially, it is about maintaining South Korea’s global competitiveness. The country urgently needs to overcome an economic crisis, the Ministry of Justice said. Key business figures were therefore involved, who had contributed to national growth through technological investments and job creation.
Lee knew what was expected of him now. “I will work hard for the national economy,” the heir to the group said on Friday before the central district court in Seoul. He is currently on trial there in another case involving accounting fraud in a merger of two Samsung subsidiaries in 2015. The pardon related only to his conviction in a national corruption scandal involving former President Park Geun Hye.
Like other business leaders, Lee had been convicted of, among other things, transferring large sums of money and monetary benefits to a confidant of the President. Along with the patriarch, the former president was also jailed after her impeachment in 2017. The 54-year-old grandson of the group’s founder had served two and a half years before being released on parole. But that didn’t solve the problem for Samsung.
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It wasn’t about the prison sentence itself. For the bosses of the large family conglomerates that dominate Korea’s economy, these are not grounds for exclusion from the company, but rather an occupational hazard. Lee’s father was pardoned twice. But until the end of the full sentence, Lee would still have been officially barred from many business decisions. From Monday he can now rule again for the time being.
Samsung is extremely important for the export nation Korea
The patriarchs are important for quick strategic decisions of the company associations, which usually cover many economic sectors. In contrast to the West, most conglomerates in South Korea are actually still managed by the founding family.
Among the giants, Samsung is paramount for the East Asian export nation. The exports of Samsung Electronics alone, the heart of the group, accounted for around a sixth of all South Korean exports at over 100 billion dollars in 2021. The group as a whole generates around one fifth of the gross domestic product.
At the same time, Samsung, as a major chip and battery manufacturer, is also important in foreign policy. South Korea’s government is trying to offer itself to its ally, the USA, as a high-tech partner for America’s reindustrialization. For example, quick decisions about high investments in US factories are crucial, which Lee can now make better.
South Korean president pardons Samsung heirs
Other magnates were also released, including Shin Dong Bin, chairman of conglomerate Lotte, as well as chief of steelmaker Dongkuk and former chairman of commodities giant STX Group. Lotte boss Shin then promised to invest more in hydrogen and biotechnology, two of the Korean government’s strategic growth areas.
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Unexpectedly, however, the 81-year-old ex-president Lee Myung Bak was not pardoned. The reason is the drop in Yoon’s popularity from over 50 percent two months ago to under 30 percent in current surveys. For among South Korea’s strong left, pardoning corporate leaders is generally met with criticism, since it does not break up the clique between politics and big business.
But a politician from the former ruling left-wing Democratic Party remains in prison. The party then promptly criticized that Yoon had not taken politicians into account this time. However, the President appealed to the economic impact of the pardons: “I hope that this special pardon will serve as an opportunity for all South Koreans to work together to overcome the economic crisis.”
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