A Seoul court ruled yesterday that former Samsung chairman Lee Kunhee was guilty of breach of trust and handed him a suspended prison sentence in another legal blow to the tycoon.
The Seoul High Court sentenced Lee to three years in prison and fined him 110 billion won ($89.2 million) but he won't go to jail if he stays out of trouble for five years. The case centred on charges that Lee caused damage to a Samsung Group company by issuing a type of bond at below market prices.
The 67-year-old Lee, wearing a dark,pinstriped suit, listened quietly to the verdict and then left the courtroom. Samsung had no comment on the ruling and said there had been no decision on whether Lee would appeal.
Lee, one of South Korea's richest people, led Samsung for 20 years following the death of his father, the conglomerate's founder. He has faced a series of legal troubles the past two years and was convicted in 2008 on tax evasion charges and given a suspended prison term.
But the Supreme Court in May upheld lower court rulings that cleared him of alleged illegal financial dealings purportedly aimed at passing control of the business empire to his son.
Lee is a South Korean corporate icon who has personified Samsung. He is widely credited with turning Samsung Electronics Co into a respected global brand. But he resigned as chairman of the company, the conglomerate's flagship corporation, upon indictment for tax evasion and other charges in April 2008.
The Seoul High Court was hearing the breach of trust case for a second time after the Supreme Court in May ordered it to reconsider an earlier verdict.
Presiding Judge Kim Chang-suk said that Lee caused damage of 22.7 billion won to the group company, Samsung SDS, over the issuance of bonds with warrants at about half of their market price.
But he cited Lee's "considerable contribution to the development" of the company in handing down the suspended prison sentence.
He also said that Lee had paid back more than the amount of the damage caused to Samsung SDS, which specialises in system integration and other IT services.
Samsung Group comprises dozens of companies. Besides electronics, it has interests in shipbuilding, construction,insurance and leisure. Its companies account for a big slice of South Korea's exports.
Civic groups have dogged the conglomerate for years, claiming its opaque ownership structure based on crossshareholdings by group companies led to abuses and was meant to ensure the Lee family maintains control.
The verdict didn't bother investors.Shares in Samsung Electronics jumped 4.1% to 731,000. Samsung SDS is unlisted.
Lee was also convicted in 1996, along with other conglomerate chiefs, over presidential bribery. That conviction also resulted in a suspended prison sentence.
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