Lee Jae-yong, Samsung Electronics Co., Ltd vice chairman now under arrest on bribery charges, must be punished to the full extent of the law if convicted, The Financial Times insisted in a February 19 editorial.
“Many in South Korea will be tempted to show him leniency,” one of the world’s most read business dailies warned. “This would be a mistake.”
“If Mr. Lee is found guilty then he must be punished to the full extent of the law,” the FT concluded.
On Feb. 16, special prosecutors tapped to investigate South Korean president Park Geun-hye’s influence-peddling scandal won court approval for the arrest of Lee, the 48-year old scion of the world’s largest technology firm, on five counts ranging from bribery to embezzlement to perjury to international capital flight.
On Jan. 19, the court had turned down an earlier request, citing concerns about “the residential conditions” of Lee’s detention. The court’s widely ridiculed concerns underscored the malicious influence Samsung can exert even on judiciary integrity in South Korea.
The charges against Lee revolve on about KRW 43 billion ($37 million) in bribes and gifts he paid Choi Soon-sil, President Park’s shamanic confidante to curry political favors. Among them were the National Pension Service’s vote in favor of a controversial merger in 2015 between two Samsung affiliates that cemented Lee’s control of Samsung Electronics. The merger cost the fund KRW 346.8 billion ($302 million), even according to the NPS’s own estimates.
If convicted, Lee could be sentenced to five years to life in prison.
Jay Y Fails at Management.
The arrest marked a fracture in the fledgling leadership of Lee, also known as Jay Y. Lee internationally. Attempts by Samsung to burnish his career have repeatedly backfired.
In 2000, tens of Samsung affiliates used related-party transactions and direct investment to prop up Lee’s first venture, e-Samsung. A year later, the online business went bankrupt, and the affiliates shouldered all losses.
In late 2016, after a botched global recall, Samsung discontinued production of Galaxy 7, the fire-prone smartphone promoted by Samsung as “Jae Yong phone” to highlight the scion’s heavy involvement with the device’s development. The Galaxy fiasco dented Samsung’s reputation especially in the U.S., where most combustible phones were reported.
Jay Y Fails in Ethics
Despite his shortcomings as business leader, Lee ascended to the helm of a corporate behemoth with $210 billion in market value through two decades of complex, oft-illicit, stock schemes that began in 1996 with his $6 million purchase of convertible bonds of the then-de facto holding company of the Samsung conglomerate.
However, what is so pernicious about the latest accusations against Samsung is that Lee, among the country’s wealthiest citizens, used ordinary folks’ pension funds to bolster his control of a publicly traded company.
Joy and Anger
Samsung cluster victims and SHARPS activists responded to Lee’s arrest with a mix of joy and anger. They were glad because for the first time in its 79-year history, and after 79 cluster-caused deaths, Samsung has appeared no longer to be above the law. They remain angry. Lee, who has never met with any cluster victims or their advocates, ingratiated himself with the president’s psychic alter-ego to pillage the retirement piggy bank of working people.
To celebrate Lee’s incarceration, SHARPS activists handed out rice cakes at a candlelight rally on Feb. 18, which drew some 800 thousand protesters calling for an immediate ouster of President Park and the arrest of other business honchos named in her corruption scheme.
A National Assembly hearing for SHARPS and Samsung is scheduled for Feb. 28.
SHARPS’s Sit-in Continues
Since Oct. 7, 2015, SHARPS and its supporters have been staging a sit-in at Samsung D’light, the company’s so-called global exhibition space in south Seoul, calling for the world’s largest technology company to: 1) compensate all victims of occupational disease transparently and sufficiently; and 2) make a sincere and full apology.