Samsung heir jailed for corruption in blockbuster trial

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"This case is a matter of Lee Jae-yong and Samsung Group executives, who had been steadily preparing for Lee's succession. bribing the president", Seoul Central District Court Judge Kim Jin-dong said, using Lee's Korean name.

"The family had an extraordinary influence over Park Geun-hye for essentially her entire adult life", David Kang, a Korea expert at the University of Southern California, told CNN a year ago.

Lee was also found guilty of perjury and other offences.

The trial of the impeached president and her longtime confidante Choi Soon-sil, who are at the center of the corruption scandal that removed Park from office in March and landed Lee in jail for a five-year term last week, is ongoing. Lee has been accused of offering bribes of 38 million Dollars for various departments after the death of his father.

Lee denied wrongdoing, and one of his lawyers, Song Wu-cheol, said he would appeal.

But since Lee's father Lee Kun-hee suffered a heart attack in 2014, he has been considered to run the Samsung empire.

Shares of Samsung Electronics closed down 2 percent, compared with a 0.35 percent drop for the benchmark Kospi index.KS11, while shares in the conglomerate's de facto holding company Samsung C&T 028260.KS dropped 3.4 percent and Samsung Life Insurance 032830.KS fell 2.9 percent due to foreign selling after Friday's sentencing, analysts said. The court's finding was that "the president's level of involvement in using the foundations in the pursuit of personal gain was active and significantly high". In return for the financial contribution, the court found that Ms. Choi colluded with Ms. Park to provide government backing for business deals relating to Mr.

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Under Korean law, Lee can be kept in detention a maximum four months while a court considers his appeal.

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

The ruling in Lee's case can be appealed twice. Instead, Samsung has insisted that a merger of two Samsung companies at the centre of the scandal was about creating business benefits.

Samsung is one of Korea's family-controlled conglomerates called chaebol. Last year, USA hedge fund Elliott Management sent a letter to the Samsung board, suggesting the company pays a special cash dividend, adopts a holding company structure and lists on NASDAQ.

Lee joined the Samsung Electronics board in October 2016 around the time of the launch of the company's Galaxy Note 7 smartphone model that continually caught fire and resulted in a subsequent termination of the model. Among those 10 giants, the leaders of six have been convicted of white-collar crimes, with many being pardoned or having had their sentences commuted.

It led the public to fundamentally question the public nature of the president's work and to have "mistrust in the morality of the Samsung group", it said. "The leadership vacuum may not have short-term effect, but in the long-term, it is a serious problem".

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