Fierce dispute expected at Samsung heir's appeal against 5-year sentence

Lee Jae-yong, Samsung Group heir, leaves after his verdict trial at the Seoul Central District Court in Seoul, South Korea on Aug 25, 2017.
Lee Jae-yong, Samsung Group heir, leaves after his verdict trial at the Seoul Central District Court in Seoul, South Korea on Aug 25, 2017.PHOTO: REUTERS

SEOUL (THE KOREA HERALD/ASIA NEWS NETWORK) - A fierce legal dispute is expected to extend this week following the Seoul Central District Court's decision to sentence Samsung Electronics' de facto leader Lee Jae Yong to a five-year prison term.

During the weekend following the court ruling Friday (Aug 25) that found the Samsung heir guilty of five major charges related to the corruption scandal of former President Park Geun Hye, Lee's legal team and the special counsel team respectively clenched their fists in preparation for the forthcoming appellate trial.

Referring to the court decision as "unacceptable", Lee's attorneys vowed to file an appeal as soon as possible, gesturing at making a move within the week.

The investigators, who previously had demanded 12 years in jail for the conglomerate chief, viewed Friday's ruling skeptically and vowed to seek for a more severe penalty in the appeals court. It is likely the investigation team will focus on proving Lee's full liability over the three charges where he was found "partially guilty".

Lee's key charges so far include Samsung's sponsorship of Chung Yoo Ra, the equestrian daughter of Park's confidante Choi Soon Sil, illegal transfer of the company's assets overseas and concealment of criminal acts.

Refuting the court's ruling that downsized the amount of money that was recognised as bribes, the prosecutors are expected to argue that the entire 43.3 billion won (S$52.34 million) was offered as donations in return for favours from the ex-president. The special counsel team is also likely to again accuse Lee of donating 20.4 billion won to the Mir Foundation and K-Sports Foundation led by Choi, for which the court issued an acquittal.

If the total amount is recognised in the bribery, the minimum sentence must be 10 years in jail, according to prosecutors.

On the other hand, Lee's legal representatives from the country's most powerful law firms are predicted to take issue with the court's grounds for conviction defined as "asking for implied favours".

 
 

"Since there is no specific definition of such a concept, there should be some logic or evidence supporting it," said a legal source.

Meanwhile, Samsung's governance restructuring plans are also expected to reel under its leader's imprisonment and the consequent suspension of major investment projects.

Last year, before the vice-chairman was detained, Samsung unveiled plans to transform Samsung Life Insurance into a financial holding company and separate Samsung Electronics into an operating company and a holding company. The two holding firms were to be incorporated later, under Lee's leadership.

Considering the court's decision on relevance of the restructuring moves to Lee's inheritance, the rest of the plans are expected to be delayed and cause major Samsung operations to rely on management specialists, like the current CEOs of Samsung Electronics' respective business divisions.

"Samsung Electronics Vice-Chairman Kwon Oh Hyun is expected to contribute to minimizing the leadership vacuum for the time being," said an official from the business community.

Kwon is currently leading the semiconductor division, the most profitable sector of the electronics unit. He has been spearheading the Samsung affiliates since Lee was detained in February.

Some business observers have predicted, however, that Lee's grip over the management may continue, regardless of his imprisonment, as it has in the past six months he has spent in custody. During this period, the company smoothly disbanded the former future strategy office and announced about 30 trillion won in investment plans for the chipmaking business.