Samsung chief Lee faces bribery counts
SEOUL, South Korea — The head of Samsung, one of the world’s largest conglomerates, was indicted on bribery and embezzlement charges on Tuesday, becoming one of the most prominent business tycoons ever to face trial in South Korea.
The indictment of Lee Jae-yong, the company’s de facto leader, came at the end of a special prosecutor’s 90-day investigation of a corruption scandal that has already led to the impeachment of President Park Geunhye. When huge crowds took to the streets in recent months to demand she leave office, they also called for the toppling of Lee and other corporate titans.
Lee was arrested on Feb. 17, a dramatic development in South Korea’s struggle to end collusive ties between the government and familycontrolled conglomerates, or chaebol, that dominate the economy.
South Koreans have grown weary of endemic corruption and the country’s traditional leniency toward tycoons accused of white-collar crimes. For decades, presidents have entered office vowing to end such favoritism, but they all eventually backtracked.
Anti-corruption advocates say Lee’s indictment and trial will be a test of whether the system can finally make a dent in those cozy relationships.
Samsung, by far the largest of the chaebol, has long been a symbol of power and wealth in a nation that has transformed itself from an agrarian economy to one of the world’s technological powerhouses. Samsung’s market capitalization accounts for one-fourth of the value of all listed companies in South Korea, and its main unit, Samsung Electronics, alone ships 20 percent of the country’s total exports.
Lee was accused of giving or promising $38 million in bribes to Choi Soon-sil, a secretive confidante of Park. In return, the prosecutor said in his indictment, Lee received political favors, most notably government support for a merger of two Samsung affiliates in 2015 that helped him inherit corporate control from his incapacitated father, Lee Kun-hee.
Lee Jae-yong also was accused of committing perjury when he insisted during a parliamentary hearing he had never bribed Choi or Park. He still claims the “donations” Samsung paid out to Choi were coerced, suggesting the company was extorted.
Samsung has said it will try to clear Lee’s name at trial. It did not immediately comment on his indictment Tuesday.
In the South Korean system, once a suspect is formally arrested, indictment automatically follows, unless evidence emerges that proves the person’s innocence. Those cases are extremely rare.
Lee, 48, a vice chairman of Samsung, has been running the company since his father had a heart attack in 2014.
His indictment comes after a challenging period for the company, which issued a global recall of it Galaxy Note 7 smartphones, the most ambitious product launched under his leadership, because they were prone to catching fire.
The elder Lee was convicted of bribery and tax evasion twice but never spent a day in jail.
Each time, he was pardoned by the president and returned to the company.
At least six of the nation’s top 10 chaebol — which generate revenue equivalent to more than 80 percent of gross domestic product — are led by men once convicted of white-collar crimes.