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President Moon Jae-in, left, and Samsung Vice Chairman Lee Jae-yong, right, clap their hands at a Samsung plant in Hwaseong, near Seoul, on April 30. Courtesy of Presidential House

Good relationship between Samsung and gov’t may affect court ruling: observers

The Supreme Court is expected to make a decision on Samsung Vice Chairman Lee Jae-yong, the de-facto chief of Korea’s biggest business conglomerate this month.

After wrapping up hearings on the case last month, the 13-member justice panel is ready to come up with a verdict, according to legal experts.

Two years ago, Lee was indicted for offering bribes to former President Park Geun-hye and her close aid Choi Soon-sil in return for their help in strengthening his control over Samsung.

Midway through 2017, a Seoul district court sentenced Lee to five years in prison. Lee was set free the next year only after an appellate court halved his sentence and suspended it.

It remains to be seen whether the Supreme Court will uphold the decision of the appeals court. Depending on the final decision, however, Lee runs the risk of being on the wrong sides of the bars once again.

If the Supreme court overturns the verdict, it has two options of urging the appeals court to make a new decision or making a final decision on its own. Under the worst-case scenario, Lee may have to return to the prison this month although the possibility is not high, observers point out.

Will Supreme Court feel pressure?

The Supreme Court is supposed to be independent of political power, but critics claim that this is not the case in Korea.

Against this backdrop, attracting attention is the incumbent administration’s attempt to boost the non-memory business in the country, which is home to the world’s two biggest memory chip makers – Samsung Electronics and SK hynix.

The two companies raked in huge profits last year thanks to rising demand for memory chips, but they are struggling this year as demand has tailed off.

This leads to criticism that the two companies alongside Korea Inc. rely too heavily on the memory business, which has prompted the government to foster the alternative non-memory business.

The joint interest in the non-memory sector seems to have ironed out the differences between Samsung and the Moon Jae-in administration, which many say has been more or less hostile to large-sized companies.

On April 22, President Moon himself stressed the significance of supporting the non-memory business. Two days later, Samsung unveiled a plan to spend more than $110 billion by 2030 to underpin such non-memory products as system semiconductors.

This prodded President Moon to praise Samsung on April 29 during a meeting with his senior secretaries. The next day, Moon visited a Samsung factory near Seoul.

In this climate, observers question whether the Supreme Court will be able to come up with an unfavorable verdict on Vice Chairman Lee – also the only son of bed-ridden Samsung Chairman Lee Kun-hee – who is awaiting its ruling on his appeal against a bribery conviction.

 

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