South Korea’s Yoon pardons Samsung’s Jay Y. Lee to counter ‘economic crisis’

South Korea’s Yoon pardons Samsung’s Jay Y. Lee to counter ‘economic crisis’

  • Samsung heir served 18 months in prison for bribery
  • Businessmen have been convicted in a scandal that ousted a president
  • S.Korea says leaders must help overcome economic crisis
  • Samsung may increase investment pardoned with Lee – analysts

SEOUL, Aug 12 (Portal) – South Korea’s President Yoon Suk-yeol on Friday pardoned Samsung Electronics (005930.KS) Vice Chairman Jay Y. Lee”.

The pardon is largely symbolic, as Lee has already been paroled after serving 18 months in prison for bribery in a scandal that sparked widespread protests and toppled then-President Park Geun-hye in 2017.

But analysts said the pardon should mean Lee can conduct business activities with fewer legal restrictions and could herald some big investments from Samsung, the world’s largest maker of smartphones and memory chips.

“Faced with the urgent need to emerge from the national economic crisis, we have carefully selected business leaders who lead the national growth engine through active technology investment and job creation to be pardoned,” Justice Minister Han Dong Hoon said at a briefing.

Technology- and export-dependent South Korea, Asia’s fourth-biggest economy, is struggling with rising inflation, flagging demand, poor sentiment and falling spending. Continue reading

Lee, an heir to Samsung’s founding family, welcomed the decision and vowed to work hard for the national economy “with continued 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 for bribery, also linked to Park.

In a statement, Lotte said Shin will 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 was struggling to keep his campaign promise to clean up the economy and politics.

A poll conducted jointly by four pollsters last month showed that 77% of respondents wanted the Samsung boss to be pardoned, despite earlier protests.

“(This support) seems to be due to the current economic situation, but people also seem to have partly thought that Lee was in a position where he couldn’t shake off the pressure from the previous administration,” said Eom Kyeong-young, a political commentator in Seoul.

While business groups such as the Korea Chamber of Commerce & Industry and the Korea Enterprises Federation welcomed Lee’s pardon, civil rights groups criticized Yoon’s businessmen’s pardon.

Jay Y. Lee, vice chairman of Samsung Electronics, exits a court in Seoul, South Korea, on August 12, 2022. Yonhap via Portal

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“Yoon Suk-yeol’s government … ultimately aspires to just one country only for the rich,” the People’s Solidarity for Participatory Democracy said in a statement.

Another jailed former president, Lee Myung-bak, was set to be pardoned after Yoon raised the possibility in June, but was ultimately 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 anticipated decisions about major projects and investments following Lee’s reinstatement, with company sources saying such decisions should only be made by Lee.

“This removes the employment constraint that Lee was technically under,” said Park Ju-gun, head of research firm Leaders Index.

“And projects that have been pursued by Samsung, such as large mergers and acquisitions or investments, could be linked to the pardon.”

Even before he received the presidential pardon, Lee was back in the limelight, appearing with President Yoon and US President Joe Biden in May when they visited Samsung’s chip manufacturing facilities in Pyeongtaek.

He also visited Europe in June to meet Peter Wennink, CEO of ASML Holding NV (ASML.AS) and to discuss the launch of key high-end chip devices. Continue reading

Last November, Samsung chose Taylor, Texas as the location for a new $17 billion chip factory. Continue reading

Top Samsung executives hinted at possible upcoming acquisition activity earlier this year. Samsung Electronics hasn’t struck a high-profile deal since completing its $8 billion purchase of audio electronics maker Harman in 2017.

Although macroeconomic factors such as a drop in demand can weigh on investment decisions, Samsung has a huge war chest.

Samsung Electronics’ cash on hand rose slightly to 125 trillion won ($95.13 billion) at the end of June, from 111 trillion a year earlier.

While experts say Lee could now participate more freely in management, his legal troubles persist due to an ongoing trial that puts him at risk of going back to prison if found guilty of fraud and stock manipulation.

Shares of Samsung Electronics ended up 0.5% versus benchmark KOSPI (.KS11)’s 0.2% gain. Lotte Corp (004990.KS) shares are down 0.6%.

Reporting by Joyce Lee, Soo-hyang Choi, Heekyong Yang; Adaptation of Lincoln Feast

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