On Friday, August 25th, vice chairman of international conglomerate Samsung (OTCMKTS:$SSNLF) Lee Jae-yong was sentenced to five years in prison. The verdict came after a South Korean court found Lee guilty of corruption. The suit that Lee faced can be associated with South Korea’s former president, Park Geun-hye. Park had been impeached earlier this year and faced a number of charges related to corruption and abuse of power.
It’s been implied that Lee had paid about $36 million illegally to a charity that was ran by Park’s friend Choi Soon-sil in return for a number of political favours. These favors include the power to restructure Samsung’s shareholding format in order to ensure that the Lee family remained in control of the company. Lee has denied all claims made against him. He plans to appeal the ruling, according to his lawyer.
Lee’s verdict is a small win against the multi-business conglomerate companies, or chaebols, in South Korea. Chaebols have largely dominated business in Korea, most likely due to their close relationship with the government. An example of a chaebol is CJ Group (KRX:001040) – a company that is best known for CJ Entertainment and CJ E&M, Korea’s biggest film and TV networks. Former president Park had used CJ to produce patriotic films like “Roaring Currents”. To make matters worse, Park had created a blacklist of entertainment companies that are forbidden from government funding during her time as president.
Lee’s arrest could potentially lead to a further crack-down on the corruption of the South Korean government and the chaebols that dominate the country.
Featured Image: twitter
