Prosecutors demanded a 12-year jail term for Jay Y. Lee, accusing the billionaire vice chairman of Samsung Electronics Co. of bribing a presidential confidante to increase his control over the world’s biggest maker of smartphones and memory chips.
Lee has been in detention since February and is the highest-profile business figure drawn into a scandal that led to the ouster of President Park Geun-hye.
The 49-year-old Lee has denied all charges, arguing he did not even know who the confidante was until after Samsung executives bought horses for an agency run to benefit her equestrian daughter.
“We have an opportunity to establish the rule of law,” special prosecutor Park Young-soo said. “The defendants have colluded with power to seek personal interests, turning their backs on people’s wish to shed light on the truth behind the scandal.”
Lee has overseen South Korea’s biggest conglomerate since 2014 when his father, Lee Kun-hee, suffered a heart attack.
In 2015 the group pushed through a merger between two of its units, giving the heir fresh shares in Samsung C&T Corp., a major shareholder in Samsung Electronics. The deal, which was opposed by investor Paul Elliott Singer, gained approval after it got backing from the government-run National Pension Service.
Lee said in testimony last week that his executives pushed the merger and that he never sought to unseat his hospitalized father as chairman of Samsung Electronics.
Prosecutors have alleged Lee knew about Park’s confidante, Choi Soon-sil, and used that knowledge to plot a succession path that would ensure his control over Samsung without having to pay billions of dollars in inheritance taxes.
Park, who has been detained on charges of corruption and abuse of power, has denied seeking bribes for her friend. Both Park and Choi have refused to testify at Lee’s trial.
Lee is scheduled to be released in late August unless he’s convicted and receives a prison sentence. In the Korean judicial system, prosecutors demand a sentence before a verdict. A panel of three judges will decide Lee’s verdict and no jury has been involved in Lee’s case.
During Lee’s absence, Samsung has released the Galaxy S8 smartphone to rebound from its Note 7 recall last year and posted a record profit on the back of its semiconductor sales.
Lee, princeling of South Korea’s richest family and its biggest company, choked up during his final remarks, saying his ordeal was unjust but he had reflected during his six months in jail and realized that the bigger Samsung became, “the stricter and higher the expectations from the public and the society”, a pool report from Monday’s hearing said.
“Whether it was for my personal profit or for myself, I have never asked the president for any favors,” he told the court.
In his remarks wrapping up the trial, Special Prosecutor Park Young-soo said Samsung’s alleged bribery was typical of the corrupt and cozy ties between the South Korea’s government and big businesses. Such dealings once helped fuel the country’s rapid industrialization but now increasingly are viewed as illegal and unfair.
Park also accused Samsung officials of lying in their testimonies to protect Lee.
In past cases, South Korean courts have often given suspended prison terms to members of the founding families of the chaebol, the big, family-controlled businesses that dominate South Korea’s economy. In some cases, presidents have pardoned them, citing their contributions to the national economy. But recent rulings on white-collar crimes have shown less leniency. If convicted, Lee may be the first in his family to serve a prison term.
Lee was indicted in February on charges that included offering $38 million in bribes to four entities controlled by a friend of then-President Park Geun-hye, including a company in Germany set up to support equestrian training for the daughter of one of Park’s friends, Choi Soon-sil.
Samsung’s lawyers do not contest having donated a large sum of money to the entities controlled by Choi. They disagreed with the prosecutors about the nature of the funds and insisted that at the time the donations were made Samsung was unaware that Choi controlled them.
Prosecutors also are seeking heavy penalties for four other former Samsung executives who had belonged to a once-powerful corporate strategy office that handled such activities.
Prosecutors are seeing a 10-year sentence for Lee’s mentor Choi Gee-sung, a former vice chairman at Samsung Electronics. They requested seven- to 10-year terms for three other former Samsung executives.
Separately, South Korean police officials confirmed on Monday that they are investigating Lee’s father, who is ill in the hospital, on allegations of embezzlement and a tax-law violation. Police officials raided the office that oversaw interior decorating of the elder Lee’s private house in central Seoul.
Bloomberg News and AP
Image credits: AP/Ahn Young-joon, Pool