[Newsmaker] Samsung chief’s parole to be decided

Every summer around this time, South Korea releases hundreds of prisoners either on parole or pardons, in celebration of Liberation Day on Aug. 15.

This year, the traditional practice of clemency has drawn particular attention as it could include one of the richest men in the country: Samsung Electronics Vice Chairman Lee Jae-yong, the de-facto chief of Samsung Group.

Come Monday, a parole committee within the Ministry of Justice will convene for a final review of candidates, which will determine Lee’s fate.

Although it has never been officially confirmed, Lee is almost certain to be on that list as he completed 60 percent of his sentence last month. He became eligible after the ministry revised its rules, effective this month.

Lee, if not released, will have to stay behind bars until July next year.

Convicted of bribing former President Park Geun-hye, the third-generation leader of Samsung Group was sentenced to 2 1/2 years in prison.

Opinions are divided over whether Lee should be released early, with business leaders stressing that his return is in the best interests of the economy. There are also diverging opinions as to how he should be released, if he is to be set free early -- through a parole or a pardon.

The local business community has asked the current administration to issue a pardon for Lee to ensure stable corporate management at the leading semiconductor manufacturer.

The heads of five economic organizations submitted a joint petition to the presidential office in April.

In June, leaders of the country’s top four conglomerates also met with President Moon Jae-in at a luncheon meeting to request a pardon for Lee. The attendees included SK Group Chairman Chey Tae-won, Hyundai Motor Group Chairman Chung Eui-sun, LG Group Chairman Koo Kwang-mo and Samsung Electronics Vice Chairman Kim Ki-nam.

A majority of Koreans support the idea of granting parole to Lee. According to a survey of over 500 adults by local pollster Realmeter, more than 66 percent of Koreans were in favor of Lee’s parole, in anticipation that it would provide a boost to the economy.

However, many labor and activist groups are against Lee’s early release, either through parole or pardon. Earlier this month, over 1,000 labor and activist groups issued a joint statement opposing his release, arguing that it violates the value of fairness.

The activist groups said it could have a negative impact on ongoing trials, one concerning the controversial merger of two Samsung affiliates and the other Lee’s alleged use of the anesthetic propofol without a prescription.

At Samsung, the void of leadership at the top appears to have slowed down decision-making.

Samsung Electronics, which last year pledged to become a global leader in the field of processor chips, or systems on chips, isn’t moving as quickly as it should, while rivals speed up their investments and business projects, industry watchers say.

In the foundry segment, Samsung’s gap with the No. 1-placed Taiwan Semiconductor Manufacturing Co. widened further in the first quarter of 2021.

TSMC in April announced that it would invest $100 billion to cement its leadership.

Intel announced last month that it would start making Qualcomm chips, while introducing future plans to expand its new foundry business in hopes of closing the gaps with TSMC and Samsung Electronics by 2025.

According to industry sources, Lee, if released, could first speed up discussion on investment in the US. Samsung Electronics is currently looking for a site in the US for its new chip fabrication factory. Potential locations include five spots in Texas, Arizona and New York.

Samsung Electronics could also push more aggressively for mergers and acquisitions with Lee back at helm.

Earlier this year, the IT giant announced that it would push forward with an M&A of significant scale within the next three years.

Last month, Samsung Electronics added that the company was looking at potential M&A deals in several areas, including the artificial intelligence, 5G and automotive businesses.

Meanwhile, Lee would still need a special exemption to return to his post at Samsung due to a five-year employment restriction that starts when his prison term ends.

Industry observers, however, said the Ministry of Justice would use its authority to lift the ban and let him return to the company if it decided to grant parole.


By Shim Woo-hyun (ws@heraldcorp.com)