Lee Jae-yong, officially vice chairman of Samsung Group but acknowledged as the company's de facto leader, is accused of embezzlement and bribery on the scale of tens of millions and was taken into custody last month. When his trial begins Thursday, he will claim innocence, Samsung sources told the Yonhap news agency.
Lee and Samsung were swept into the far-reaching investigation of corruption and influence peddling in the administration of impeached South Korean President Park Geun-hye and her mysterious and powerful confidante, Choi Soon-sil.
Special prosecutors on the case suspect that Lee gave or promised more than $38 million to Choi to ensure that the Korean government would support a 2015 merger of two Samsung affiliates. The merger was in Lee's personal interest, as it was seen as critical to the transfer of power between Lee and his father, Samsung Group Chairman Lee Kun-hee, Yonhap explains. The bribes helped ensure that control of Samsung remained in the hands of the Lee family.
The younger Lee insists that the merger was lawful and needed no government assistance, though prosecutors believe the president pushed South Korea's corporate watchdog, the Fair Trade Commission, to approve the merger. He also says he was coerced into donating to Choi's family and to nonprofit foundations that is said to have controlled.
Lee the younger is not the first of his family to face scandal and possible prison time. His father was sentenced to two years in prison for bribery and corruption in 1996, but served no time. He was found guilty in 2008 of hiding more than $4 billion and evading tens of millions in taxes. He could have faced life in prison, but instead was pardoned a few months later by the then-South Korean president, apparently so Lee could keep his position on the International Olympic Committee and help bring the 2018 Winter Games to South Korea.
The Samsung Group is one of the lynchpins of the South Korean economy, with its various affiliates making up more than 20% of the Korean Stock Exchange and its businesses accounting for perhaps 15% of the country's entire economy, according to a recent CNN Money report.
That economic power has historically been able to move judicial and political mountains. But perhaps no more. Moon Jae-in, an opposition lawmaker seen as the favorite in the country's next presidential election, said, "We should not miss this opportunity to cut the corrupt ties between politics and businesses," the New York Times reports.
"Only when Samsung repents its collusion with politics and its anti-market activities, like seeking political favors, can it become stronger."
The company has promised to shake up its management as a response to the scandal. But then, they have done this before. The currently-embattled Lee's father stepped down in 2008, after his second major corruption exposure. He returned to lead the company just two years later.
