[Column] Critical point for Lee Jae-yong, Samsung and capitalism in S. Korea

Posted on : 2021-07-27 17:48 KST Modified on : 2021-07-27 17:48 KST
Lee Jae-yong needs to finish out his two-year and six-month sentence for his own sake and for Samsung’s
Jae Jeong-im
Jae Jeong-im


By Jae Jeong-im, Semyung University Graduate School of Journalism

"Uneasy lies the head that wears the crown.”

This quote from Shakespeare was used as the tagline for “The Heirs,” a Korean miniseries that drew high viewership numbers a few years back. A cartoonish take on the stories of chaebol members and other privileged families, the show drew attention for portraying the misfortunes of people born into vast wealth but burdened by the weight of the crown amid their splendid citadels.

If asked to name somebody from real life who best embodies the uneasiness of crown-wearing, many might well pick Samsung Electronics Vice Chairman Lee Jae-yong.

Still in his early 30s at the time, Lee was faced with widespread censure almost as soon as he set foot in the public eye when around 40 law professors lodged a 2000 complaint against his father, then-Samsung Chairman Lee Kun-hee, accusing him of using questionable legal tactics to donate company assets to his offspring.

This became known as the “Everland convertible bond discount” incident. It was an achy beginning for the head that was being prepared to wear the crown. Lee Jae-yong would end up taking the stage again as a figure in a slush fund incident following allegations in 2007 by attorney Kim Yong-cheol, a former head of the Samsung legal affairs team.

But while that incident led to revelations that Lee Kun-hee had stashed trillions of won in borrowed-name accounts and evaded upwards of 100 billion won (US$86,908,540) in taxes, he did not face either arrest or jail time. Instead, he was handed a suspended sentence, after which he was granted a “one-point pardon” by then-President Lee Myung-bak and reinstated in his management role.

His fate drove home the fact that the head of South Korea’s number one chaebol does not face punishment when they commit a crime.

During the entire process, from Lee Kun-hee’s investigation to his trial and eventual pardon, most of the media either feigned ignorance of his misdeeds or cashed in on a big boost in Samsung advertising as they published calls to pardon him “for the sake of the national economy and the Pyeongchang Winter Olympics bid.”

Other news outlets that were more critical in their reporting, including the Kyunghyang Shinmun and the Hankyoreh, saw their Samsung advertising dry up, while rumors spread that they “might not have enough money to pay salaries.” Many bemoaned what was being described as the “Republic of Samsung.”

For Lee Jae-yong, the experience of being imprisoned for his role in a government influence-peddling scandal is a matter of personal misfortune. But for South Korean democracy and capitalism, it could also be seen as a significant step forward. Finally, the Republic of Korea is a place where even the head of the number one chaebol faces punishment when they commit a crime.

But that progress is now in jeopardy amid intensifying calls recently for a pardon or parole. Things are looking dicey for President Moon’s pledge to “sternly punish crimes of corruption by chaebol and limit use of the authority to grant pardons.”

It’s a textbook case of plutocratic politics, where the same ruling and opposition party politicians and officials who once cried for economic justice are now bloviating about how Lee should be pardoned or paroled while various media bang the drum for them.

Their argument that Lee should be released because we “need to win the global semiconductor war” is just another version of the same old saw: If you have money — and lots of it — you can get off the hook.

Lee Jae-yong needs to finish out his two-year and six-month sentence for his own sake and Samsung’s.

During the influence-peddling trial, he pledged to create a Samsung legal compliant oversight committee and uphold the law. He can show how sincere this promise was by respecting the sentence handed down in his final trial.

Many people suspect that Samsung is now hoping to make full use of politicians, the government, and the media to secure a pardon or release for Lee. If this happens, it will only cement the perception that we do live in the Republic of Samsung after all — that Samsung has the power to turn the Republic of Korea on its head.

That would lead, in turn, to strong demands for punishment in other cases, such as the Samsung Biologics accounting fraud trial. The “environmental, social and corporate governance” practiced by Samsung affiliates will be regarded as rank hypocrisy.

What if Lee took the opportunity to declare that he doesn’t want a pardon or release and that he intends to complete his sentence? What if he vowed to focus on working as majority shareholder to ensure that Samsung is the kind of ethical company whose executives don’t end up in prison?

This would be a way for him to remove some of that crown-related uneasiness for the sake of his own future while also helping to save capitalism in a country that is demanding the rule of law.

Moon Jae-in needs to honor his pledge to reform chaebol and respect the rule of law. It’s one thing if you try to do a good job with your policies and they don’t end up working out — but none of his supporters would accept him turning his back on core values.

On July 6, 1,056 civic groups announced their opposition to a pardon or parole for Lee Jae-yong. Park Jung-eun, secretary-general of the group People’s Solidarity for Participatory Democracy, said that the administration must not cross the “last river.”

On July 18, 781 intellectuals denounced the notion of a pardon or parole as “something that would destroy the foundations of the rule of law and the historical value of fairness.” Supporters of reform could well end up taking to the streets.

According to reports, Lee’s name came up in a Ministry of Justice list of candidates to be reviewed for parole for the National Liberation Day holiday on Aug. 15. It’s a crucial moment right now — for Lee Jae-yong, for Moon Jae-in, and for capitalism in South Korea.

Please direct comments or questions to [english@hani.co.kr]

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