South Korea’s Supreme Court orders Lee Jae-yong retrial on bribery charges
in Seoul ordered that Lee Jae-yong be released from jail in February last year, Samsung’s boss had reason to believe that the worst was over. Moon Jae-in, South Korea’s left-wing president, who had kept his distance from its biggest for its role in the scandal that brought down his predecessor, was quick to mend relations. Last autumn he took Mr Lee on a jolly to North Korea. Earlier this year, he launched his national semiconductor strategy at a Samsung factory outside Seoul.
Such hopes were dashed on August 29th, when the Supreme Court overturned the ruling by a lower court that had suspended Mr Lee’s prison sentence, and ordered his case to be retried. The judges said that, contrary to Mr Lee’s claims, Samsung had not been exhorted by a confidante of Park Geun-hye, the disgraced former president, when it gave her daughter three horses worth around $3m.
The ruling is also troubling for Samsung, which is already struggling with falling semiconductor prices, the fallout from the trade war between America and China and Japanese export restrictions on three chemicals that are essential for chipmaking. Mr Lee is not directly in charge of day-to-day decision-making at the company. But strategic decisions about how to deal with these and future challenges may still be delayed until his fate is certain.
Advocates of corporate reform hope that the verdict will convince Samsung and other conglomerates to make good on their vows to improve transparency and corporate governance, which would benefit them in the long term. Mr Lee’s previous jail term, while bad for the company’s reputation, had little impact on Samsung stocks, suggesting its fortunes are not necessarily tied to his. A decent corporate structure would help the company more than the scion’s swift return to the helm.
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