Choi Soon-sil was accused of using her presidential connections to pressure conglomerates – including electronics giant Samsung and retail group Lotte – for millions of dollars in donations to two non-profit foundations she controlled.
She is already serving a three year jail term for a separate charge of corruption, after she was found guilty of using her position to solicit favors for her daughter.
Park Geun-hye meanwhile has been accused of colluding with Choi Soon-sil. She is currently in custody, with a verdict expected later this year.
The court has also found Shin Dong-bin, chairman of the Lotte Group, guilty of offering bribes to Choi Soon-sil, and jailed him for two years and six months.
President Park Geun-hye was officially ousted in March 2017, following parliament’s decision to impeach her. She was the country’s first democratically-elected president to be forced from office.
After losing her presidential immunity, Park Geun-hye was charged with bribery, abusing state power and leaking state secrets, and her trial began in May.
Lee Jae-yong was accused of giving donations worth 41 billion won ($36 million) to non-profit foundations operated by Choi Soon-sil, a friend of South Korea’s former President Park Geun-hye, in return for political favors.
Prosecutors said the donations were made to Park Geun-hye’s confidante to win government support for a big restructuring of Samsung that would strengthen Lee Jae-yong’s control over Samsung Electronics.
A lawyer for Lee Jae-yonghas said already said they will appeal against the decision.
“We are confident the ruling will be overturned,” lawyer Song Wu-cheol told reporters after the ruling, according to Reuters.
Nevertheless this ruling represents a huge blow to South Korea’s biggest and most well-known business empire. Since the verdict, Samsung shares fell by 1%.
Lee Jae-yong’s conviction raises questions about his leadership of the conglomerate. He has been standing in as chairman since his father, Lee Kun-hee, suffered a heart attack in 2014.
The Samsung scandal contributed to President Park Geun-hye’s eventual impeachment. Park Geun-hye’s friend, Choi Soon-sil, has already been jailed for three years for corruption.
Prosecutors say Lee Jae-yong gave 43 billion Korean won ($38 million) to President Park Guen-hye’s friend, Choi Soon-sil, for political favors.
Park Geun-hye is suspected of colluding with Choi Soon-sil to get conglomerates to donate to Choi’s foundations.
The ousted president was arrested last week, after being impeached, and sent to a detention centre, although she has not yet been formally charged.
Image source Reuters
Lee Jae-yong, who appeared in court in handcuffs, has denied the bribery allegations, saying Samsung was coerced into handing over the funds.
Another four Samsung executives have also appeared in court in connection with the scandal. They also deny the accusations.
Lee Jae-yong’s case is “one of the most deep-rooted and typical cases involving unhealthy relations between politicians and businessmen,” said Special Prosecutor Park Young-Soo in his opening statement in Seoul’s Central District Court.
The 48-year-old vice-chairman of Samsung Electronics has been the parent company Samsung Group’s de facto head since his father Lee Kun-hee suffered a heart attack in 2014.
On April 7, the chairman of the powerful Lotte conglomerate, Shin Dong-bin, was also being questioned by prosecutors in connection with the widening corruption probe.
They are investigating whether donations given by Lotte to foundations allegedly controlled by Choi Soon-sil were bribes connected to the firm’s bid for a lucrative duty-free business.
Samsung VP Lee Jae-yong has been questioned for a second time as a suspect in South Korea’s biggest political corruption scandal.
Prosecutors are expected to decide based on the hearing whether they will seek an arrest warrant for Lee Jae-yong.
Samsung is accused of giving donations to non-profit foundations run by a confidante of President Park Geun-hye in exchange for political favors.
Lee Jae-yong told reports before the hearing: “I will once again tell the truth.”
He had already been questioned with several other company executives in January but a subsequent court ruling decided there were insufficient grounds for an arrest.
Image source Wikimedia
Yet during the past weeks investigators reviewed the case and decided there were new aspects that required further questioning.
The claims against Samsung revolve around a merger between the electronics giant’s construction arm, Samsung C&T, and an affiliate company, Cheil Industries.
The prosecution alleges that Samsung gave 2.8 million euros ($3.1 million) to a company co-owned by President Park Geun-hye’s confidante Choi Soon-sil and her daughter, in return for political support for the deal.
The scandal led to President Park Geun-hye being impeached in December 2016.
Lee Jae-yong, also known as Jay Y. Lee, first gave evidence in front of a parliamentary hearing in December 2016. Since January he has been treated as an official suspect in the case.
At the parliamentary hearing, Samsung admitted giving a total of 20.4 billion won ($17.46 million) to the two foundations, but denied seeking favors in return.
Lee Jae-yong also confirmed Samsung gave a horse and money to help the equestrian career of Choi Soon-sil’s daughter, Chung Yoo-ra, something he said he now regretted.
Choi Soon-sil is on trial for charges including corruption and coercion.