hankyoreh

Samsung Vice Chairman heads to the Seoul High Court for his trial on Jan. 18. (Kim Hye-yun, staff photographer)

South Korea’s Ministry of Justice (MOJ) notified Samsung Electronics Vice Chairman Lee Jae-yong that he will be subject to employment restrictions following his two-year, six-month prison sentence in connection with a government influence-peddling scandal, the Hankyoreh has learned.

The employment restrictions mean that Lee will not be able to take part in management activities. He is also to be stripped of his title as vice chairman.

According to an investigation by the Hankyoreh on Feb. 16, the MOJ’s dedicated economic crimes team notified Lee and his representatives on Feb. 15 that he would be subject to employment restrictions and provided information on the procedures for requesting employment authorization. This comes three weeks after Lee's sentence was finalized.

On Jan. 18, Lee was given a prison sentence of two years and six months on charges of embezzling some 8.68 billion won (US$7.8 million) in company funds and providing it as bribes to former President Park Geun-hye and her associate Choi Soon-sil (who has since changed her name to Choi Seo-won). The sentence was finalized on Jan. 25 after Lee’s team declined to attempt another appeal.

The Act on the Aggravated Punishment, etc. of Specific Economic Crimes states that those convicted on charges of embezzlement or breach of trust involving amounts of 500 million won (US$451,000) or more may not be employed at any company connected with their criminal activity.

In such cases, the law prohibits any management activities, along with the receipt of compensation from a company negatively impacted by embezzlement or other acts. The employment restriction remains in effect for a five-year period after the person has finished serving their prison sentence.

One example of a chaebol head previously impacted by these employment restrictions is Hanwha Group CEO Kim Seung-youn. Following an employment restriction notice in 2014, Kim had to step down from all positions within his group, including his chairmanship.

But Lee is also allowed to ask the MOJ to waive the employment restrictions . If Lee’s camp decides to apply for such a waiver after receiving a restriction notice, an advisory body to the Minister of Justice called the “special economic crimes management committee” holds a meeting to review the matter, while the minister is empowered to grant final approval.

Early last year, employment authorization was granted in the case of an economic crime involving the embezzlement of 1.3 billion won (US$1.2 million) in company funds. The decision was based on factors including the fact that the individual in question had repaid the majority of funds involved.

A MOJ official said, “If we receive a waiver request, we plan to address it at a later date according to our review procedures.”

The Samsung legal compliance oversight committee held a meeting the same day, but Lee’s employment restrictions were not among the topics discussed. Samsung did not respond to the Hankyoreh’s questions about whether Lee planned to apply for employment approval.

By Ock Kee-won & Song Chae Kyung-hwa, staff reporters

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