Samsung CEO Asks Employees For Calmness After Lee's Sentence

Sprawling corruption scandal has rocked South Korea

Lee Jae-yong 2017 Getty Images Samsung heir Lee Jae-yong was sentenced to five years in prison Friday for bribery and corruption

Samsung, founded in 1938 by Lee's grandfather, is a household name in South Korea and a symbol of the country's dramatic rise from poverty following the 1950-53 Korean War.

On Friday, the resulting scandal claimed its latest scalp, as a court jailed Lee Jae-yong, the heir to mega-conglomerate Samsung, for five years on bribery and corruption charges.

Lee, 49, was accused of offering $38m in bribes to four entities controlled by Choi Soon-sil, a friend of Park.

Lee was handed a five-year sentence after a six-month trial over a scandal that brought down the then president, Park Geun-hye. Lee has been accused of offering bribes of 38 million Dollars for various departments after the death of his father.

Lee's lawyer has steered media inquiries to Samsung, whose spokeswoman did not have any immediate comment about the appeal.

The Samsung heir has been effectively in charge since his father, group chairman Lee Kun-hee, was hospitalized following a heart attack in 2014.

Last year, Elliot, which owns a 0.62-percent stake in the Korean chipmaker, called on Samsung Electronics to split itself into two units - a holding company and an operating firm - and list the latter on the tech-heavy NASDAQ market. "We hope that it would pave the way to end persistent government-business collusion, which has hampered society from moving forward", its spokesman Yoon Young Chan said.

After the sentencing, Lee's attorneys said they can not accept the verdict, saying they were confident that the heir would be cleared of all charges at an appeals court. Twice convicted of tax evasion and bribery, the elder Lee never spent any time in prison.

The decision will test whether Samsung can succeed without the crown prince of the Lee family at the helm.

Samsung Electronics Vice Chairman Kwon Oh-hyun delivered an official statement to staff on August 28 on the latest verdict on the firm's heir-apparent Lee Jae-yong, urging workers to continue giving best efforts.

Thus far, Samsung's revenue equal about one fifth of the country's GDP, and some sources fear the imprisonment of a notable commercial figure may cause ripple effects through the country.

Experts, however, said Samsung is expected to face challenges over the long-term as the company may struggle to make decisions for key projects including merger and acquisitions.

The Samsung trial has been portrayed within South Korea as a referendum on Seoul's commitment to cracking down on what critics say is the coddling of South Korea's top companies and their leaders.

They said Lee was aware that Park wanted Samsung to sponsor the equestrian training. Some were pardoned and others got sentences reduced on appeal. Lee's conviction, which if upheld on appeal would prolong the company's leadership vacuum.

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