Samsung’s de facto leader, Lee Jae-yong, will be released from prison on parole later this week, though it remains unclear how—or if—he can return to work right away at South Korea’s largest conglomerate.
Mr. Lee, who had been serving a 30-month prison sentence for bribing South Korea’s ex-president, was among a list of inmates granted parole at a Monday review meeting, according to South Korea’s justice ministry. He is expected to be released on Friday.
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Mr. Lee, also known as Jay Y. Lee, plays a vital role atop a business enterprise that spans dozens of affiliates, including its crown jewel electronics division that is the world’s largest maker of smartphones, semiconductors and televisions. Major decisions require his signoff.
But the 53-year-old grandson of Samsung’s founder may not be allowed to resume his duties. Under South Korean law, individuals who commit economic crimes are subject to a five-year employment ban, while those paroled face restrictions on overseas travel.
The Justice Ministry, which approves such exemptions, didn’t comment on the matter. In a briefing on Monday evening, Justice Minister Park Beom-kye said Mr. Lee’s parole had factored in “the nation’s economic situation due to the prolonged Covid-19 pandemic, as well as the global economic environment."
A Samsung spokeswoman declined to comment.
Mr. Lee, who holds the title of Samsung vice chairman, has led the conglomerate since 2014 when his father was incapacitated by a heart attack. He is widely expected to eventually take the Samsung chairmanship following his father’s death last year. The elder Lee’s death set off a generational transfer of power. As part of that transition, Mr. Lee and his family owe roughly $10 billion in estate taxes.
The third-generation Samsung leader has been embroiled in legal troubles for years. He first went to prison in early 2017 as he awaited a trial for bribing former South Korean president Park Geun-hye, in exchange for government backing for a 2015 merger between two Samsung affiliates that helped cement his ownership of the conglomerate. He was eventually given a five-year prison sentence.
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Mr. Lee was released from prison in February 2018 by an appeals court judge who lightened the original punishment. In a retrial ordered by the country’s Supreme Court, Mr. Lee received a 30-month prison term that sent him back to jail in January. His first prison stint counted toward the new sentence—which meant by this month he had collectively served about 60% of his prison term, enough to pass a threshold for parole.
But even after being twice imprisoned and twice released, Mr. Lee is still not in the clear.
He faces potential imprisonment in a separate, though related, case investigating alleged financial fraud at a Samsung subsidiary that had a role in the 2015 merger. The case could stretch on for several years, legal experts say. Mr. Lee also faces a potential trial for alleged abuse of propofol, a sedative approved only for only medical usage in South Korea. He has denied the charges in both cases.
Kim Woo-chan, a South Korean corporate-governance expert who teaches business at Korea University in Seoul, questioned if Mr. Lee met all the criteria for parole—like feeling remorse for the crimes—given that there are two cases pertaining to the intra-conglomerate merger. Mr. Lee was found guilty in the bribery case, for which he was just paroled, while he denies all criminal accusations for the other, even though they relate to the same event, Prof. Kim added.
“How do you say that is deeply repenting?" said Prof. Kim.
The sway that Mr. Lee wields across South Korea’s corporate behemoth has fueled the arguments both for and against his parole.
Without Mr. Lee, Samsung’s key business lines can’t make bold moves to maneuver during a global chip shortage and the Covid-19 pandemic, his backers say.
In April, a group of five influential South Korean business groups proposed that Mr. Lee get a presidential pardon, suggesting that his absence could mean the country loses its top status in the semiconductor industry.
In a Monday statement, the Korea Chamber of Commerce and Industry welcomed the ministry’s decision but expressed regret that by only paroling Mr. Lee, the Samsung leader would still face impediments to conducting business, including taking meetings with overseas partners or visiting foreign production sites.
Critics, including corporate-governance experts and foreign investors, argue that Samsung should be capable of operating without the involvement of a single, dynastic leader. Justifying Mr. Lee’s parole for the sake of “economic revitalization" or “corporate growth" will perpetuate the country’s tradition of white-collar crime by business tycoons, said People’s Solidarity for Participatory Democracy, a Seoul-based activist group.
“This is a death sentence for judicial justice," the group said in a Monday statement. “Opportunities are unequal, the process is unfair, the outcome is unjust."
This story has been published from a wire agency feed without modifications to the text
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