South Korean President Yoon Suk-yeol pardoned Samsung Electronics Vice President Jay Y. Lee On Friday, South Korea’s justice ministry said the business leader was needed to help overcome a “national economic crisis.”
Forgiveness is largely symbolic, with Lee is already on parole after serving 18 months in prison for bribery related to his time at the helm of the world’s largest smartphone and memory chip maker.
However, it should mean that Lee will be able to conduct business activities more freely and could announce some big moves for Samsung, analysts said.
“With urgent needs to overcome the national economic crisis, we have carefully selected economic leaders who lead the national growth engine through active investment in technology and job creation to be pardoned,” said Justice Minister Han Dong Hoon in an information session.
Lee, a scion of Samsung’s founding family, welcomed the decision and pledged to work hard for the national economy, Yonhap news agency reported.
Also pardoned by pro-business President Yoon was Lotte Group Chairman Shin Dong-bin, who was sentenced to two and a half years in prison on bribery charges.
“We sincerely appreciate the government and people’s decision to grant the pardon, and Chairman Shin Dong-bin and Lotte staff members will contribute to overcoming the complex global crisis,” Lotte said in a statement.
Back to business
Even before receiving the presidential pardon, Lee had returned to the spotlight, appearing in May with President Yoon and US President Joe Biden when they visited Samsung’s Pyeongtaek chip production facility.
He also visited Europe in June to meet with ASML Holding NV CEO Peter Wennink to discuss the adoption of key high-end chip equipment.
Analysts have long expected decisions on major M&A projects and investments once Lee is reinstated, and company sources say those decisions should be made by Lee alone.
“This removes the employment restriction that Lee was technically under,” said Park Ju-gun, head of research firm Leaders Index. “And projects that were being carried out by Samsung, such as major mergers and acquisitions or investments, could be tied to the pardon. There is a good chance that announcements will be made in the future.”
Last November, Samsung decided on Taylor, Texas, as the site of a new $17 billion chip plant.
While experts say Lee could now be more freely involved in management, his legal risks still linger because of an ongoing trial where he faces charges of fraud and stock manipulation.
“With his trial, Lee could face another prison term if convicted. However, the presidential pardon gives him some flexibility to handle major management issues at the moment,” said Lee Kyungmook, a professor at the ‘Seoul National University Graduate School of Business.
Top Samsung executives have hinted earlier this year about possible upcoming acquisition activity. Samsung Electronics has not pursued any high-profile deals since completing its $8 billion purchase of audio electronics maker Harman in 2017.
While macroeconomic factors such as a drop in demand can influence investment decisions, Samsung has a huge war chest.
Samsung Electronics’ cash balance rose slightly to 125 trillion won ($95.13 billion) at the end of June from 111 trillion a year earlier. Samsung Electronics shares were trading up 1% compared with a 0.1% rise in the KOSPI. Shares of Lotte Corp were down 0.8%.