Samsung's heir gets lengthy prison sentence, throwing company plans in disarray
Back in 2017, Lee Jae-yong, the vice chairman of Samsung and would-be heir of the tech empire at the time, was found guilty in a bribery and embezzlement scandal, and was sentenced to 5 years in prison.
Lee was accused of wiring the equivalent of almost $40 million from Samsung subsidiaries to two foundations set up by a confidante of impeached president of South Korea Park Geun-hye. The money was allegedly paid out to win favor from the country's state pension fund, which supported a merger between two Samsung affiliates in 2015.
This was reportedly done in a bid to secure regulatory approval for the merger of two Samsung affiliates in 2015, despite the majority of shareholders in the conglomerate being opposed to the $8 billion merger.
Lee was accused of wiring the equivalent of almost $40 million from Samsung subsidiaries to two foundations set up by a confidante of impeached president of South Korea Park Geun-hye. The money was allegedly paid out to win favor from the country's state pension fund, which supported a merger between two Samsung affiliates in 2015.
The verdict saw him stay locked up for about a year, and then released earlier after a sentence reduction, seemingly just in time to take the chief role in the succession plans of his dying father, Samsung's chairman Lee Kun-hee, son of the company's founder.
With Lee Jae-yong in jail, what would the impact on Samsung be?
The trial was reopened by Korea's Supreme Court in 2019, however, which overturned the original verdict so after the retrial it looks like Lee Jae-yong is heading back to prison, reports Bloomberg. For how long? Bloomberg's report says that the former president's verdict is upheld for 20 years, but the heir apparent is going to serve 30 months, which is, apparently, still angering his legal reps.
That's right, the new verdict saw deliberations where "Lee, 52, was accused of offering horses and other payments to a friend of the former president to win support for his formal succession at the corporation," and has actually already been upheld by the Supreme Court, so some prison time for Lee seems inevitable now.
The news comes on the heel of Samsung's announcements that it will be pouring over a hundred billion dollars into next-gen chipset, display, and 5G equipment, meaning to take on TSMC, get an early lead in foldable phones, and capitalize on Huawei's decimation by blacklisting.
If Lee Jae-yong was only a figure head skating on his father's money, the impact on those future plans of Samsung wouldn't be very noticeable, but he was actually the person with the vision to restructure and provide the long-term strategic planning that was behind those multibillion moves of the company in the first place. If and how him going to prison for a prolonged sentence will impact Samsung's future operations remains to be seen, but we hope that the exciting future plans for new technologies remain intact, at least in the next few Galaxy iterations.
Needless to say, Mr Lee could very well serve the whole duration of its 2.5 years sentence to set an example nonetheless, so hopefully Samsung has contigency plans for whatever is in its pipeline for that period.
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