It was a huge deal when South Korea decided to convict Samsung heir Lee Jae-yong — also known as Jay Y. Lee in the west — for bribery in one of the most bizarre scandals in the country’s history. It was also massive when, after getting off easy in 2018, Lee was sent back to prison in January. Well, buckle up folks, because Lee is set to be released from prison… and it’s believed the global chip shortage may have been a factor.
South Korea’s justice ministry made the decision on Monday, with Lee’s release scheduled for this Friday — just two days before National Liberation Day. According to Bloomberg, authorities made the decision after considering public sentiment, Lee’s “attitude during incarceration,” and ongoing economic concerns spurred by the pandemic and the global chip shortage.
Lee had served six months of his 18-month sentence for his second stint in jail. However, that time plus the year he spent in jail the first time around meant he was eligible for parole. In South Korea, inmates are eligible for parole after serving 60% of their sentence. Recent public surveys also indicated that the majority of South Koreans supported Lee’s parole.
The decision is a fraught one. Business leaders hope that Lee returning to his position will help Korea maintain its status as a top chip producer, as well as help mitigate the effects of the global pandemic on the country’s economy. If you’re wondering why a South Korean billionaire would single-handedly be capable of all that, Samsung is Korea’s No. 1 chaebol — a family-run conglomerate that’s effectively a corporate dynasty.
Chaebols have historically held outsized influence in national politics and the economy. They account for 77% of the market value of Korean companies on the Asia300 Index and depending on the year, Samsung alone makes up to 20% of Korea’s GDP. And given that Lee is the “Crown Prince of Samsung,” well, it all starts to make sense.
Bloomberg reports that his release may help Samsung’s ambitions to build a chipmaking plant in the U.S., as well as another deal with Samsung Biologics Co. to produce the Moderna vaccine. The Wall Street Journal also cites Lee’s backers as saying that without Lee, Samsung has been unable to smoothly navigate the impacts of the global chip shortage and the pandemic.
In the past, it’s been common for corrupt chaebol leaders to receive presidential pardons. That makes it somewhat notable that Lee’s only been given parole, given he is facing two other charges — one in a related case to a dubious merger with a Samsung subsidiary, and another where Lee is accused of illegally using a sedative.
However, even though most South Koreans support Lee’s parole, activists and labour groups are upset at the ruling. According to the Korea Times, more than 1,000 labour and activists groups issued a statement opposing Lee’s parole. In a press conference last week, Park Jeong-eun, the leader of activist group People’s Solidarity for Participatory Democracy, argued that Lee is not actually remorseful for his actions, that Samsung should be able to run without Lee, and that granting him parole was the equivalent of saying the rule of law was dead.
The news is a blow for those trying to end chaebol influence in Korean society. However, it should be noted that Lee announced last year that he would not hand the company over to his children. In any case, the Samsung drama is absolutely not over yet. In South Korea, economic crimes are subject to a five-year employment ban, and parolees are barred from overseas travel.
Lee would have to be granted an exemption by the Justice Ministry, though Justice Minister Park Beom-kye didn’t comment on whether that was in the cards. This all means Lee’s fortunes could flip yet again, so don’t put away the popcorn just yet.