Samsung Electronics Co vice chairman Jay Y. Lee is to be released from prison on Friday after a Ministry of Justice committee recommended that he receive parole, marking a dramatic reversal for South Korea’s political and business landscape ahead of a presidential election early next year.
The ministry yesterday decided to grant parole to the de facto leader of Samsung two days before Liberation Day on Sunday, South Korean Minister of Justice Park Beom-kye said during a briefing.
Authorities reached the decision after taking into account Lee’s “emotions toward society and his attitude during incarceration,” as well as the impact of the prolonged COVID-19 outbreak on the national and global economies, Park said.
Photo: AFP
Lee, 53, was sent back to jail for a second time in late January, after he was convicted of using bribery to win support for his formal succession at Samsung.
The billionaire had served six of the 18 months he had been expected to spend behind bars during his second stint, on top of the year he was incarcerated before his initial released in 2018.
In the months since his imprisonment, a supply crunch in the global semiconductor industry and Samsung’s role in facilitating a COVID-19 vaccine deal with the US have fanned calls from business leaders and politicians to free the de facto head of South Korea’s largest conglomerate and chipmaker.
Still, activists have criticized any decision to free Lee, saying the move is proof of preferential treatment for the country’s powerful tycoon class known as chaebols.
The decision reflects South Korean President Moon Jae-in’s dilemma between defending his political legacy and helping his party ahead of the next presidential election. Convicted chaebol leaders, including Lee’s father, Lee Kun-Hee, had typically received pardons instead of paroles by past presidents.
However, granting parole is seen as less risky, as it can be approved by the justice minister without seeking consent from the president, who was elected four years ago on a progressive platform that included the overhaul of chaebol business practices.
While Lee is set to be released from jail ahead of Liberation Day, the billionaire still needs to seek exemption from a five-year employment restriction before he can return to running the conglomerate.
Lee’s return to the helm at Samsung could expedite key initiatives, such as a US$17 billion investment plan in the US or major mergers and acquisitions.
The company has announced plans to build an advanced chipmaking plant in the US, in hopes of winning more US clients and narrowing the gap with industry leader Taiwan Semiconductor Manufacturing Co.
Its pledge to build a US manufacturing base had helped facilitate Samsung Biologics Co’s deal to manufacture Moderna Inc’s vaccines, Bloomberg News previously reported.
“If Lee is pardoned on the National Liberation Day of Korea, we believe Samsung would actively look for more large-scale M&As [mergers and acquisitions] to drive long-term growth,” Citigroup analyst Peter Lee said in a note. “Large scale M&As need a sign-off from Lee, which was lacking due to his absence. Management remains committed to utilize its cash reserve to complete a meaningful M&A over the next three years.”
Even though Lee is set to be release, he still faces the prospect of returning to prison if he is convicted of other charges. The billionaire is being prosecuted in a separate case involving the merger of two subsidiaries, while he also faces trial for alleged illegal anesthetic use.
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