South Korea’s biggest family fortune and consumer electronics empire, Samsung, is in a world of trouble. A South Korean court sentenced the chief of Samsung to five years in prison for bribery and other crimes in a stunning downfall for the heir.
The Seoul Central District Court announced on Friday that Lee Jae-yong was found guilty of offering bribes to Park Geun-hye when she was South Korea’s President, and to Park’s close friend, to get government support for efforts to cement his control over Samsung’s empire. The revelations that led to Lee’s arrest in February fed public outrage which contributed to Park’s removal as president.
Lee was also found guilty of embezzling Samsung funds, hiding assets overseas, concealing profit from criminal acts, and perjury. Lee offered a whopping $38 million in bribes to four entities controlled by Choi Soon-sil, a long-time friend of Park, in exchange for government help with a merger that strengthened Lee’s control over Samsung after his father suffered a heart attack in 2014.
Samsung has not denied transferring corporate funds. Lee, however, claimed innocence during the court hearing. He said he was unaware of the donations which were overseen by other executives.
Judges pointed to an unusual arrangement in which Samsung bankrolled equestrian training for Choi’s daughter as proof of Lee’s knowledge of what was transpiring. They said Lee was aware that Park wanted Samsung to sponsor the equestrian training.
Samsung secretly provided a huge amount of money to Choi’s Germany-based company that paid for the training and the exorbitantly priced foreign horses worth 3.6 billion won ($3.2 million USD). The amount was actually part of the bribes.
Other former Samsung executives charged with Lee were also found guilty. Choi Gee-sung, a mentor of Lee, and Chang Choong-ki were sentenced to four years in prison. Two other former executives received suspended prison terms.
The ruling in Lee’s case can be appealed twice. Samsung will appeal the ruling immediately, Song Woo-cheol, a Samsung attorney, told reporters. However, it is highly unlikely that the ruling be reconsidered.