South Korea Court Jails Samsung VP Lee Jae-yong For 5 Years

The court ruled that Lee had paid bribes in anticipation of favours from ousted President Park Guen-hye.

The billionaire head of South Korea's Samsung Group Lee Jae-yong (also known as Jay Y Lee) was jailed for five years for bribery on Friday in a watershed moment for the country's decades-long economic order dominated by powerful, family-run conglomerates.

After a six-month trial over a scandal that brought down the then president, Park Geun-hye, a court ruled that Lee had paid bribes in anticipation of favours from Park.

The court also found Lee guilty of hiding assets abroad, embezzlement and perjury.

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 Park to help secure control of a conglomerate that owns Samsung Electronics, the world's leading smartphone and chip maker, and has interests ranging from drugs and home appliances to insurance and hotels.

This case is a matter of Lee Jae-yong and Samsung Group executives, who had been steadily preparing for Lee’s succession... bribing the president.

Seoul Central District Court Judge Kim Jin-dong

Kim said that as the group's heir apparent, Lee "stood to benefit the most" from any political favours for Samsung.

Lee denied wrongdoing, and one of his lawyers, Song Wu-cheol, said he would appeal.

"The entire verdict is unacceptable," Song said, adding that he was confident his client's innocence would be affirmed by a higher court.

The five year-sentence - one of the longest given to a South Korean business leader - is a landmark for South Korea, where the family-run conglomerates, known as chaebols, have long been revered for helping transform the once war-ravaged country into a global economic powerhouse.

But they have more recently been criticised for holding back the economy and stifling small businesses and start-ups.

Leadership Vacuum

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 a prolonged leadership vacuum, with no one to make big decisions, could slow decision-making at the group.

Many tycoons, including Lee’s father, were convicted of crimes in the past, ranging from bribery, embezzlement and tax evasion, only to get presidential pardons, as both the government and the public feared going too hard on them would hurt the economy.

But South Korea's new liberal president, Moon Jae-in, who won a May election, has pledged to rein in the chaebols, empower minority shareholders and end the practice of pardoning tycoons convicted of white-collar crime.

(This article has been edited for length)

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