Former Samsung boss receives suspended jail term

Avoids prison for corruption charges

By Austin Modine, 16th July 2008

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The former chairman of the Samsung Group and one of South Korea's most powerful business leaders was given a stiff fine and sent on his way for corruption allegations.

Lee Kun-hee was sentenced to three-years in jail, suspended for five years, for tax evasion while being cleared of more serious charges.

The court fined Lee 110bn won (about $109m), more than double the amount of taxes he withheld. Lee was also cleared of breach of trust and illegally transferring bonds in an alleged scheme to hand control of the Samsung empire to his son.

Prosecutors sought a seven-year jail term and a 350bn won ($346m) fine for Lee. However, South Korean authorities are notoriously hesitant to put white collar criminals behind bars for fear it could have a negative impact on the country's economy.

Samsung accounts for nearly 18 per cent of South Korea's gross domestic product and one-fifth of its exports. Lee stepped down as chairman in April after he and nine other senior executives were indicted on tax dodging charges, but he remains a key Samsung shareholder.

Allegations stem from Samsung's former chief counsel Kim Yong-chul, who also claims the company ran a bribery network encompassing prosecutors, politicians, and other officials. Those charges were dropped when prosecutors said there was insufficient evidence, and the deadline for action set by South Korea's statute of limitations had passed.

Lee's conviction comes one month after the chief of Hyundai Motor was also handed a three-year suspended sentence after being found guilty of fraud. ®

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Posted Thursday 17th July 2008 09:18 GMT

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