Jaeyong Lee: Returning to Samsung as a special envoy for Liberation Day…Leaving the question of ‘economic’ vs ‘fairness’

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Samsung Electronics Vice Chairman Lee Jae-yong will return to the forefront of management with this lottery ticket

Samsung Electronics Vice Chairman Lee Jae-yong was included in the first special amnesty (special envoy) issued by the Yun Seok-yeol government on the occasion of the 8/15 Liberation Day. With this, Vice Chairman Lee was able to conduct normal business activities.

On the morning of the 12th, the government held a briefing at the Government Complex in Seoul presided over by Minister of Justice Han Dong-hoon and revealed these details.

In addition to Vice Chairman Lee, the business envoys included four others: Lotte Group Chairman Shin Dong-bin, Dongkuk Steel Chairman Jang Se-joo, and former STX Group Chairman Kang Deok-soo.

The government stated its purpose was “to overcome the economic crisis through economic revitalization.”

Why pay attention to ‘Samsung Jae-yong Lee’

Ahead of this announcement, whether or not to pardon Vice Chairman Lee received a lot of attention at home and abroad.

Vice Chairman Lee was sentenced to two years and six months in prison in January last year on charges of embezzlement and bribery in connection with the government nongdan case that occurred during the Park Geun-hye administration. He was released on parole on the 13th of August last year, and his sentence expired on the 29th of last month.

In the case of Vice Chairman Lee, since his sentence has expired, strictly speaking, he cannot be regarded as a ‘special envoy’ exempt from the execution of the sentence. The key is the ‘lottery’ that usually follows with a special envoy. Reinstatement means the restoration of qualifications lost or suspended due to the effect of a sentence of imprisonment.

This is because, according to the Act on the Aggravated Punishment of Specific Economic Crimes (Special Price Act), if a person commits a crime such as embezzlement or breach of trust worth more than 500 million won, his/her employment will be restricted for five years from the date the sentence is terminated or it is decided not to be executed.

In this case, you can exercise influence as a shareholder, but it becomes difficult to hold a specific position in the company and participate in management activities.

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Some civic groups criticized Lee’s special amnesty as unfair law enforcement

‘Law enforcement should be fair’ vs ‘Considering the economic ripple effect’

The business community has actively advocated for Lee’s reinstatement, but opinions from academia and civil society were divided.

The Venture Business Association issued a statement on the 25th of last month, saying, “Based on the entrepreneurial spirit of business people, it revitalizes the Korean economy and preoccupies the global market of new industries through broader activities, large-scale investment revitalization, innovative technology development, and creation of quality jobs. “I hope that businesspeople will be given a chance to repent by making them the vanguard of overcoming the economic crisis with their dedication and mission,” he said.

The Citizens’ Coalition for Economic Justice (Gyeongsilyeon), a civic group, said in a statement on the 9th, “The law should be applied equally to everyone. “The emperor’s management and the exploitation of private interests must also be eradicated. Only then can the growing polarization and inequality of the economy be alleviated,” he emphasized.

Some civic groups, including the Gyeongsilren, also emphasized that Vice Chairman Lee was not ‘innocent’ enough to be reinstated. The trial is currently underway on suspicions of fraudulent accounting by Samsung Biologics and an unfair merger between Samsung C&T and Cheil Industries.

Not all citizens’ opinions about Vice-President Lee’s lottery are negative.

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As a result of a nationwide index survey last month, 77% of respondents supported the special amnesty of Samsung Electronics Vice Chairman Lee Jae-yong.

Yoon-Kyung Lee, a sociology professor at the University of Toronto, said, “Many aspects are considered when discussing Korea, Samsung, and the economy. “We also understand that market vitality cannot be maintained if large corporations dominate the economy as a whole,” he said.

As a result of the National Indicators Survey (NBS) of 1006 adult men and women from the 25th to the 27th of last month, 77% of the opinions in favor of Vice Chairman Lee’s special amnesty on Liberation Day were much higher than those against (19%). (Joint research with Embrain Republic, K-Stat Research, Korea Research, and Korea Research)

In the same survey, the proportion in favor of Chairman Shin Dong-bin, former President Lee Myung-bak, and former Gyeongnam governor Kim Kyung-soo was significantly higher than 49%, 39%, and 32%, respectively.

Although the position of the business community and ordinary citizens is different, the main reason for favoring the special envoy is ‘economic revitalization’. But will Vice Chairman Lee and other business special envoys actually bring positive results to the Korean economy?

‘Entrepreneur’s special envoy, a political issue rather than an economic one’

Noh Jong-hwa, a lawyer at the Solidarity for Economic Reform, said it was difficult to agree with the economic effect of the special envoy for businessmen in two respects.

Above all, it is difficult to see that a company will stop growing just because the head of the chaebol does not participate in the management. For example, when Vice Chairman Lee was arrested for one year from February 2017, his operating profit was 53.6 trillion won, an increase of more than 80% from the previous year.

He also argued that the Korean economy could no longer expect a ‘falling water effect’. In other words, the economic structure that relies on chaebol conglomerates is facing a growth limit.

Lawyer Noh said, “The fact that the trickle-down effect has decreased is a matter that everyone can agree on to some extent.” Then, “Now, the perception that if you are the head of a conglomerate like Vice Chairman Lee, and you can only grow it, you need to change the perception that you can turn a blind eye to all illegalities.” ” he claimed.

Hong Ki-hoon, a professor of business administration at Hongik University, said that the special amnesty for entrepreneurs is a political issue rather than an economic one.

Professor Hong pointed out, “The advantage of chaebol ownership management is that it has a long time horizon and can make bold investments. did.

He continued, “(The only thing that can be explained economically) is the conclusion theory.”

However, Professor Hong said that it is difficult to agree with some of the arguments that corporate investment in the form of compensation for special envoys only increases the company’s stomach again and does not lead to the national interest. This is because it is not possible to clearly distinguish between corporate interests and national interests.

Businessmen who had previously been granted a special pardon showed active investment and support. Former Samsung Group Chairman Lee Kun-hee, who was pardoned in 2009, began activities to bid for the Pyeongchang Winter Olympics. Chey Tae-won, chairman of SK Group, who was pardoned in 2015, built several production facilities in Korea, including a semiconductor plant in Icheon, Gyeonggi.

He said, “It is difficult to say conclusively that the investment made by the special envoy is for the company or for the state. , in this case, there is no choice but to undermine national competitiveness.”

Further coverage: BBC Singapore Online News


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