Samsung Heir Jay Y. Lee Released From Prison on Parole

Samsung Electronics Vice Chairman Jay Y. Lee has been released on parole after 207 days in prison at the Seoul Detention Center. Lee was convicted of using bribery and corruption to take control of Samsung. While released, he still faces the prospect of returning to prison if convicted in another, ongoing case. Both center on the means Lee used in trying to take control of the company founded by his grandfather, a saga that brought down a South Korean president and reignited public outrage over the cozy relationship between government and business. Lee’s imprisonment created a vacuum atop the world’s largest producer of memory chips, smartphones and consumer appliances at a time when the Covid-19 pandemic and U.S.-China tensions are intensifying competition. His release comes just months ahead of South Korea’s presidential election.

Lee, 53, is the vice chairman of Samsung Electronics Co. and heir apparent to South Korea’s largest conglomerate. His father, Lee Kun-Hee, led the group for many years until he suffered a heart attack in 2014. The elder Lee died Oct. 25 after years in a coma, during which time his son became the de facto leader. Lee solidified his control after inheriting his father’s stakes in three Samsung affiliates and resolving the inheritance tax issue. (South Korea has one of the heaviest rates in the world.) The family’s wealth is estimated at about $30 billion, according to the Bloomberg Billionaires’ Index, and their tax bill has been estimated at about $10 billion.

South Korea’s special prosecutors first indicted Lee in early 2017 on charges of corruption, alleging that Samsung provided horses and other payments to a confidante of the former president to win support for his succession. The case inflamed opinion against the country’s powerful conglomerates, or chaebol, and triggered the impeachment of then-President Park Geun-hye. Lee was initially convicted and sentenced to five years in prison, but the sentence was halved and then suspended in 2018 and he was released from jail. However, the Supreme Court in August 2019 overturned the lower court’s decision to suspend the sentence and ordered a retrial. He was convicted in January and sentenced to two years and six months in prison.

In early August a justice ministry committee recommended he be paroled. Last year prosecutors had sought an arrest warrant because of the other case, but the Seoul Central District Court rejected the request. That trial opened Oct. 22, 2020 and could last well into 2022, then another two years with appeals. (Meanwhile, Lee was indicted in June in connection with the alleged illicit use of propofol, a powerful anesthetic. That trial was scheduled to start in August. )

The ongoing case is also related to succession. Prosecutors indicted 11 people including Lee and former Samsung executives after digging into the details of a controversial merger between two Samsung Group’s units in 2015. The investigation kicked off after the financial regulator concluded that Samsung Biologics Co. intentionally violated accounting rules and inflated its value ahead of an initial public offering. Prosecutors suspect the violation was to justify the merger ratio between Biologics’ major owner Cheil Industries and Samsung C&T, which helped bolster the value of the heir’s stake in Cheil and his influence at Samsung Group.

Officially Lee needs to get an exemption from a five-year restriction on employment to take back the helm at Samsung. But it’s a gray area. He’s been running the conglomerate for about two years without a board seat and may continue to be engaged. He still needs to get approval from the authorities for overseas travel. Samsung had largely continued business as normal during the years-long probe, and investors have been mostly unfazed. But his return could expedite initiatives such as a $17 billion investment plan in the U.S. or major mergers and acquisitions.

Subscribe to our YouTube channel

Subscribe to our newest channel Quicktake Explained

Bloomberg Quicktake brings you live global news and original shows spanning business, technology, politics and culture. Make sense of the stories changing your business and your world.

To watch complete coverage on Bloomberg Quicktake 24/7, visit or watch on Apple TV, Roku, Samsung Smart TV, Fire TV and Android TV on the Bloomberg app.

Have a story to tell? Fill out this survey for a chance to have it featured on Bloomberg Quicktake

Connect with us on…

Breaking News on YouTube