Original URL: http://www.theregister.co.uk/2009/08/14/samsung_boss_guilty_free/

Ex-Samsung boss convicted for fraud

Gets off lightly with $89.2m fine

By John Oates

Posted in Financial News, 14th August 2009 11:59 GMT

The ex-chairman of Samsung Lee Kun-Hee has been found guilty of abuse of trust over a dodgy bond issue.

Lee was fined $89.2m and got a suspended prison sentence.

The bonds were issued at below market price and were designed to gift control of the massive conglomerate to his son Lee Jae-Yong, AFP reports.

His three year sentence is suspended for five years. The court said in mitigation that Lee had paid the money back to Samsung SDS - the group's IT services division.

A year ago, Lee was found guilty of tax evasion and fined $109m, along with a suspended jail sentence. At that time he was cleared of illegally transferring bonds to his son, but prosecutors pushed for a retrial. Korean courts are not keen on locking up big business bosses, who are seen as a vital and central part of Korean society.

Lee is an important figure in South Korea - he took over the chairmanship of Samsung in 1987 from his father Lee Byung-Chull, who founded the company and oversaw its early meteoric growth from a fruit and vegetable business to a vast conglomerate of electronic, manufacturing and chip making businesses. Kun-Hee pushed Samsung through the "Second Foundation" - a radical restructuring of the company, its culture and the markets it operated in.

Samsung remains one of the handful of the family-run chaebols, with the likes of LG, Daewoo, Hyundai, which all but created modern Korea in partnership with the government. Samsung still provides a large fraction of the country's total exports.

He ran the firm for 20 years, until his trial in 2007 for tax evasion. ®