Speculators Bet Samsung Will Turn to Lee's Sister to Take Charge

The billionaire heir to the Samsung empire has been sentenced to five years in prison after being convicted of offering bribes to South Korea's former president.

Lee, who denied all charges against him, had faced the possibility of spending 12 years behind bars, so it sounds like he got off fairly easy.

South Korea's president Moon Jae-in reportedly promised to clamp down on the chaebols and on white collar crimes by corporates just before winning a landslide victory in May this year. In other cases of business tycoons under prosecutorial investigation, right-hand executives avoided sentence when their chiefs went to prison, allowing the group to manage business in general until their owners were released. Lee's lawyers are expected to submit an official appeal, so chances are that this case will ultimately be decided by the South Korean supreme court, and that could take a while.

"We can not accept the verdict", said Lee's lawyer Song Woo-chul.

The Lee clan directly owns about 5 per cent of Samsung Electronics shares, but maintains its grip on the wider group through a byzantine web of cross-ownership stakes involving dozens of companies.

Also known as Jay Y. Lee, the executive is technically the "chaebol's" Vice Chairman, but he's been running the company for a few years now after his father suffered a heart attack. South Korean business leaders, including Lee's father, were convicted for corrupt behavior in the past but received lenient sentences. Since his arrest in February, Lee has insisted the payments were made to Samsung without his knowledge, and with no expectation of favours from the Park administration.

Spieth surges towards Open title as McIlroy struggles
That led one sympathetic journalist to suggest to him he must be proud that he fought back and showed true character. In majors, 31 players have shot 63, including 10 in the Open , but 62 had become untouchable.

Concluding a five-month trial, a panel of three judges found Lee, as well as four other leaders, to be guilty of paying bribes totaling 43.3 billion won (US$38.3 million).

Lee, 49, confirmed in his testimony the company gave millions to Choi's foundations, but he denied Samsung had sought favors in return.

Other former Samsung executives charged with Lee were also found guilty. But the fact these non-profit structures were linked to the Choi Soon-sil, a close friend of South Korea's ex-President Park Geun-hye, became an alarm for the police.

He has been sentenced to five years in prison. Two of them had their sentences suspended. Lee, who was represented by a team of 28 lawyers, has always professed his innocence and will appeal the sentence. Experts previously told CNBC that whatever verdict comes down on the Samsung heir, it will not affect the day-to-day business at Samsung.

Prosecutors have argued that Park and Lee two took part in the same act of bribery so Lee's conviction would appear ominous for Park.


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