The verdict closes Jay Y Lee on key decisions at the world’s largest electronics company at a time of global uncertainty.

A South Korean court has sentenced Samsung Electronics vice chairman Jay Y Lee to two and a half years in prison, which affects the direction of the tech giant and how Koreans view big business.

Monday’s ruling will exclude Lee from major decisions at Samsung Electronics as it seeks to overtake competitors and from overseeing the legacy of his father, who passed away in October.

Lee, 52, was convicted of bribing an employee of former President Park Geun-hye and was sentenced to five years in prison in 2017. He denied wrongdoing, his sentence was reduced and on appeal, and he was released after one year in prison.

The Supreme Court then sent the case back to the Seoul Supreme Court, which issued Monday’s decision.

Under South Korean law, prison sentences of three years or less can only be suspended. For longer sentences, the person must serve out the term, unless it is a pardon from the president. After Lee returns to prison, the year he was previously in prison is expected to count towards the sentence.

Ascent delayed

Lee’s rise to the presidency of Samsung after his father’s death in October is likely to be delayed until he is released.

Regardless, he faces another case related to a controversial merger between Samsung C&T and Cheil Industries in 2015 that focuses on allegations ranging from violations of capital markets law to breaches of duty. Lee has to attend the prison hearings in this case.

The conviction on Monday can be appealed to the Supreme Court. However, since the Supreme Court has already ruled on this once, it is less likely that its legal interpretation will change, according to legal experts.

“In a case returned by the Supreme Court, there is a narrower range of options for the bench … but it is also true that the Supreme Court cannot really touch the verdict of the final court,” said Rha Seung-chul, a lawyer not associated with the case.

The ruling creates a vacuum on the world’s largest manufacturer of memory chips, smartphones, and consumer devices, while the COVID-19 pandemic exacerbates growing global economic uncertainty and increases competition.

While Samsung’s day-to-day business is run by an army of managers, Lee’s absence can stall or aggravate massive investments or strategic longer-term actions. The executive has played an active role in the company and has often attended government and public events after his release from prison.


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