SEOUL, South Korea – Former Samsung Chairman Lee Kun-hee saw the suspension Wednesday of his prison sentence in a tax-evasion conviction, a move that confirmed South Koreans' view that tycoons are immune from jail.
The Seoul Central District Court convicted Lee for failing to pay tens of millions of dollars in taxes, and imposed a hefty fine of 110 billion won ($109 million) against the man who led the country's most powerful business conglomerate before he resigned in April over the allegations that included a range of fiscal crimes.
Still, the court said putting the 66-year-old Lee behind bars would be too harsh because he did not actively seek to evade the taxes.
“The extent of his crime is not serious enough to sentence him to prison,” Judge Min Byung-hun said. He sentenced Lee to three years in prison and then suspended the sentence for five years, meaning Lee will not go to jail as long as he avoids further legal woes.
After the verdict, a relieved-appearing Lee said: “I'm sorry for causing trouble to the people.”
Lee, one of the richest men in South Korea, is the latest in a series of South Korean tycoons whose lawyers deftly used their clients' “contributions” to the country's economic development to help them avoid jail despite guilty verdicts.
Last year, Hyundai Motor Co. Chairman Chung Mong-koo was sentenced to three years in prison for embezzlement, but a higher court suspended the sentence, saying he was too important for the nation's economy to go to jail.
The chairman of another big conglomerate who assaulted bar workers allegedly involved in a fight with his son – Kim Seung-youn from Hanwha Group – received 1 1/2 years in prison last year, but also saw that sentence suspended on appeal.
South Korean judges' penchant for such leniency toward heads of big conglomerates, known as chaebol, has often been dubbed in local media as the phenomenon of “rich means not guilty.”
“The judiciary ... officially confirmed today that families of South Korea's chaebol chiefs are immune to the law,” the Solidarity for Economic Reform, a Seoul-based civic group, said in a statement. “The court declared on its own that it is no longer an organization that is seeking judicial justice.”
Prosecutors had sought a seven-year sentence and 350 billion won ($347 million) in fines against Lee. The office of special prosecutor Cho Joon-woong said it would appeal Wednesday's ruling.
But Cho had drawn strong criticism from civic groups in April when he indicted Lee for financial wrongdoing but cleared him of bribery allegations and did not arrest him, saying it would cause disruption to Samsung's corporate management and have “negative repercussions on our economy.” Lee himself resigned less than a week later.
The probe against Lee and Samsung was prompted by allegations by a former company lawyer that Samsung created a large slush fund to bribe prosecutors, officials and other influential figures.
Lee, who personified Samsung Group as its head for two decades while it grew into one of the country's most prominent global brands, was indicted in April on three charges – tax evasion, breach of trust and securities law violations.
The court cleared Lee of the breach of trust charges, citing insufficient evidence. Those charges stemmed from allegations of dubious financial transactions to transfer corporate control to his son.
The court did find that Lee violated the securities exchange law by failing to report changes in ownership of his stock assets. But the judge said the violation was minor and did not weigh much in deciding the sentence.
It was Lee's second conviction. In a 1996 case, he was found guilty of having made payments to South Korean President Roh Tae-woo, who served from 1988 until 1993. About half a dozen other chiefs from chaebol, South Korea's family-run conglomerates, were also convicted.
