Samsung Group is without a plan if its Vice Chairman and de facto leader Jay Y. Lee is to receive a lengthy prison sentence tomorrow, industry sources said earlier this week. Mr. Lee is awaiting a verdict from the Seoul Central District Court which is set to rule on his case on Friday and reveal whether it will grant the prosecutors’ demand for 12 years of prison for Mr. Lee due to allegations of corruption, bribery, and the embezzlement of corporate funds. The trial will be broadcasted by local media in South Korea and 30 people will be able to personally attend it by being seated in the courtroom’s public gallery, with over 450 people having already applied to witness what some media have dubbed “the trial of the century.”
Mr. Lee is accused of paying approximately $38 million in bribes to several organizations connected to Choi Soon-sil, a close associate of former President Park Geun-hye, with the goal of ensuring the completion of a controversial 2015 merger of two Samsung Group-owned companies which transitioned more corporate power to the part of the chaebol controlled by its founding Lee family while simultaneously financially hurting the largest state pension fund in the Far Eastern country which was a major shareholder of one of the two consolidated subsidiaries. The organizations backed by Samsung at the supposed behest of Mr. Lee were all founded primarily for supporting Ms. Park’s policy initiatives. In the aftermath of the scandal, the Korean parliament voted to impeach Ms. Park who is currently going through her own trial on the matter and has repeatedly refused to testify against Mr. Lee, citing health reasons.
Mr. Lee claims that the payments which the prosecutors believe were bribes were approved without his involvement or knowledge, with some of Samsung’s other officials indicted in the case stating that they were forced to financially support the Ms. Choi-led organizations following pressure from former President Park. A similar defense was given for allegations that Samsung also bribed Ms. Choi by donating millions of dollars to her daughter Chung Yoo-ra who was also arrested as part of the investigation earlier this year, with the Danish authorities extraditing her to South Korea in late May. Mr. Lee is understood to be ready to appeal any guilty verdict which will be approved or dismissed by a superior judicial body next year, though Samsung’s currently leaderless structure may not be able to survive that long without serious consequences, some industry watchers are speculating.