Samsung Heir Lee Jae-yong Convicted of Bribery, Gets Five Years in Jail

By Eun-Young Jeong Features Dow Jones Newswires

Samsung's de facto leader, Lee Jae-yong, was found guilty of bribing South Korea's former president and sentenced to five years in prison on Friday for his role in a corruption scandal that helped bring down the previous government.

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Mr. Lee, the vice chairman of Samsung Electronics Co. and the heir to South Korea's largest conglomerate, didn't show any obvious reaction to the sentence as he left the courtroom. His lawyers said they planned to appeal the decision immediately.

While less than the 12 years sought by prosecutors, the sentence extends a period of uncertainty at Samsung, with Mr. Lee behind bars and his father, the Samsung chairman, incapacitated following a heart attack three years ago.

Prosecutors alleged Mr. Lee tried to bribe President Park Geun-hye in return for government backing for key Samsung business deals. Along with bribery, he was charged with embezzlement, hiding assets abroad, concealing criminal profits and perjury. The court found Mr. Lee guilty on all charges.

Samsung had acknowledged it agreed to pay about $38 million to entities linked to the president's close friend, Choi Soon-sil, of which about half went toward a German sports-consulting company to pay for equestrian training for Ms. Choi's daughter. Samsung denied the payments were in return for favors.

The court found that most of the payments related to the equestrian training constituted bribes, where Mr. Lee had embezzled about $5.7 million. The total figure for embezzlement and bribery was higher.

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In exchange for these financial contributions, prosecutors say, Ms. Choi colluded with Ms. Park to ensure government backing for several deals, most notably a controversial merger of two Samsung affiliates in 2015 that helped Mr. Lee consolidate his hold over Samsung Electronics. The merger changed Samsung's intricate cross-shareholding structure and, prosecutors said, allowed Mr. Lee to avoid a steep inheritance-tax bill as he sought to succeed his father at the top of the conglomerate.

Mr. Lee denied all the charges. He testified earlier this month that as vice chairman of Samsung Electronics he was rarely involved in decisions affecting the broader Samsung empire, which spans dozens of companies.

Ms. Park, who was removed from office following a unanimous vote by the Constitutional Court in March, is facing a separate trial on 18 charges, including bribery and coercion. She has denied wrongdoing. Ms. Choi, her friend, is also facing charges in connection with the scandal and has also denied wrongdoing.

Write to Eun-Young Jeong at Eun-Young.Jeong@wsj.com

(END) Dow Jones Newswires

August 25, 2017 03:10 ET (07:10 GMT)