Lee Jae-yong gave up reappeal of “Moderately Accepted Judgment” Reins of Samsung Compliance Management

The sentence of Samsung Electronics Vice Chairman Lee Jae-yong, who was sentenced to imprisonment in the court for destruction and repatriation of Gukjeong Nongdan, was confirmed in June 2nd. This is because both Vice Chairman Lee and the special prosecutor have decided not to reapply. Vice-Chairman Lee is analyzed to have given up the re-appeal, considering the aspect that there is no legal basis for claiming that “the sentence is too heavy” even after re-appealing.

On the 25th, both the special prosecutor and Vice-Chairman Lee’s attorney announced that they had decided to accept the sentence of the remand and reconciliation trial without reappealing to the Supreme Court.

Vice-Chairman Lee’s defense counsel said, “We decided not to reappeal and accept this verdict humbly,” on the morning of the last day when re-appeal is possible under the Criminal Procedure Act. Subsequently, a special prosecutor issued a statement in the afternoon and announced that “this decision was based on the purpose of the decision of the Supreme Court, and decided not to reapply.”

Earlier, the first criminal division of the Seoul High Court (presiding judge Jung Joon-young) sentenced to a sentence of two years and June in prison at a trial for repatriation of Lee, who was charged with bribery and other charges on the 18th. As both sides gave up their re-appeal, the sentence for Vice Chairman Lee was confirmed in 2 and June. Vice-chairman Lee’s status has been changed from pending votes to ending votes. The remaining sentence is one year and June, and Vice-Chairman Lee is scheduled to be released in July next year. Vice-Chairman Lee, who was arrested in February 2017, served for about one year (353 days) until he was released along with a probation of execution of an appeal before remand in February 2018, the following year, which is excluded from his sentence.

There is a possibility of parole before the expiration date in July next year. This is because two-thirds of the sentence will be served in August, meeting the requirements for parole. However, some observers say that parole is difficult to predict because it requires the approval of the Minister of Justice and the President. Another variable is that a trial is underway on the alleged illegal succession of management rights, which Vice Chairman Lee has as the defendant.

The possibility of commuting or pardoning is also open. Lee Kun-hee, the late vice-chairman’s father, was sentenced to three years in prison, five years probation, and a fine of 110 billion won for three years in prison on charges of betrayal and tax evasion in August 2009.

On that day, Samsung did not come up with a stance on the waiver of Lee’s reconsideration. Internally, various concerns are raised, such as the misery that Vice Chairman Lee was convicted and the possibility of business disruption due to a void in the total number in the future, and it is predicted that compliance management efforts will be fueled by the conclusion of the sentence.

A business official said, “It seems that the stance on the re-appeal by the attorney contained Lee’s personal will.” The company’s compliance management efforts will be strengthened.”

As Vice-Chairman Lee’s sentence was confirmed by abandoning the re-appeal, controversy over restrictions on employment also arose.

According to the legal profession, Vice-Chairman Lee is in principle prohibited from working at Samsung Electronics even after he finishes his sentence in accordance with the Employment Restriction Regulations of the Act on Specific Economic Crimes (Special Police Act).

This is because Article 14 of the Special Police Act prohibits employment in related companies for five years after the sentence was completed. The approval of the Minister of Justice is required to re-employment.

The issue of employment restrictions is Article 10, Paragraph 2 of the Enforcement Decree of the Special Economics Act. This article stipulates that the subject of employment restrictions is’enterprises in which the accomplice of the convicted person was an executive or manager level or higher at the time of the crime, or an executive or manager level or higher. Employment was forbidden in a company where an accomplice was or is currently working.

Vice-Chairman Lee was accused of embezzling 8.6 billion won in the Supreme Court in connection with the Gukjeong Nongdan case. In this regard, former president Park Sang-jin and former executive director Hwang Seong-soo were convicted of accomplices. If the provisions of the law are strictly applied, employment will be restricted to Samsung Electronics, where these executives served.

However, there is controversy regarding the actual application. In the business world, according to the precedent of SK Chairman Choi Tae-won, there is a counterargument that this vice-chairman is not subject to employment restrictions because Lee has been working unpaid at Samsung Electronics.

Vice-Chairman Lee, who has continued to be employed since joining in 1991, is also pointing out that employment restrictions are difficult to apply because he is not getting a new job. A business official said, “At the moment, unless Vice-Chairman Lee is granted pardon, there is a possibility that he will need to obtain the approval of the Minister of Justice to return to Samsung Electronics after his sentence.” In addition to having to make important decisions such as paying the inheritance tax, it is another burdensome factor for Samsung and Vice Chairman Lee.”

[노현 기자 / 홍혜진 기자]
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