The heir to the huge Samsung business empire yesterday appeared in court at the start of his trial for embezzlement and perjury, part of a corruption scandal that brought down South Korea’s president.
Samsung Electronics vice chairman Jay Y. Lee was escorted into the Seoul Central District Court bound and handcuffed. Lee, who was arrested in February, has been charged with paying nearly US$40 million to former South Korean president Park Geun-hye’s close friend Choi Soon-sil, allegedly as bribes to secure policy favors.
Four other Samsung executives have also been charged.
Special Prosecutor Park Young-soo said in his opening statement that Lee’s case is “one of the most deep-rooted and typical cases involving unhealthy relations between politicians and businessmen.”
“In the course of providing bribes, Lee embezzled company money, illegally diverted domestic assets abroad, hid illegally earned income and committed perjury at the legislature,” the prosecutor said.
“The Choi case has left a deep scar in history, but it has also provided momentum to re-establish the rule of laws by dint of people’s power,” he added.
Park Geun-hye was last week thrown in jail after a court ordered her arrest in connection with the sweeping corruption scandal that brought millions of people onto the streets and saw her impeached.
Close confidante Choi is also on trial for forcing top South Korean firms, including the tech giant, to “donate” nearly US$70 million to nonprofit foundations that she allegedly used for personal gain.
However, Lee’s lawyers said the payments to Choi were charitable contributions for sports and culture development that Samsung was obliged to make under pressure from officials, and not bribes.
The prosecutor’s charges against Lee were based on “prejudice and prejudgement” and not backed up by evidence, the legal team said.
Prosecutors said Lee had asked for policy favors in return for the bribes when he spoke to Park Geun-hye alone during three meetings from 2015 to last year — an allegation later dismissed by the defense.
The verdict is expected to be delivered late next month.
One of the favors Lee allegedly sought from the former president was state approval for a controversial merger of two Samsung units in 2015, seen as a key step to ensure a smooth transfer of power to him.
The deal was opposed by many shareholders, who said it willfully undervalued one of the two firms, but the merger eventually went through after the national pension fund — a major Samsung shareholder — approved it.
Lee’s arrest — the first for a Samsung chief, even though his father was twice convicted of bribery — sent shock waves through the company and triggered the announcement of a major reform of its top-down management style.
Lee has effectively been at the helm of Samsung since his father had a heart attack in 2014.
The scandal has cast a renewed light on the cozy ties traditionally enjoyed by the government and family-controlled conglomerates known as chaebols that dominate the country’s economy.
The groups have increasingly become objects of public scorn as criticisms mount over their management practices, including rapid promotions for family members — some of whose antics have battered the firms’ reputations.
Millions of South Koreans taking part in weekly street rallies demanding Park Geun-hye’s removal have also called for the arrest of tycoons involved in the scandal, including the leaders of Hyundai, SK and Lotte.
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