Lee, the vice chairman of Samsung Electronics, was handed a suspended sentence of 2.5 years by the Seoul High Court on Monday after nearly a year in detention, South Korea’s Yonhap news agency reported.
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The billionaire was convicted in August last year of bribing the country’s then President Park Guen-hye with $8.2m in return for government backing of a business merger.
The 49-year-old was also found guilty of embezzlement, hiding assets overseas, concealing profit from criminal acts and perjury.
The case led to months of mass protests and Park’s eventual impeachment in December 2016.
Prosecutors had wanted Lee to serve a 12-year jail term.
Lee’s lawyer expressed his “respect for the court’s courage and wisdom to give a not guilty verdict of key charges.”
However, both the prosecutors and Lee, who denies the allegations, have appealed Monday’s ruling.
Under South Korean law, sentences of more than three years cannot be suspended.
Al Jazeera’s Natasha Ghoneim, reporting from the South Korean capital said the court’s decision has already generated a lot of response.
“Some of the words we’re hearing are ‘shocked’, ‘speechless’ and we expect there will be enough anger that there could be protests over this appellate court ruling in the coming days.”
Lee, who was arrested in February last year, is the only son of the ailing Samsung Group chairman Lee Kun-hee.
He was sentenced in August along with other former Samsung executives as part of a widespread corruption crackdown of the conglomerate.
“Despite the fact that Lee was in jail for a year, it was common knowledge that he continued to run Samsung behind bars,” said Al Jazeera’s Ghoneim.
“They even have a term for it here, called jail management.”
Amid the bribery claims, thousands protested calling for Park to step down. She was indicted on multiple charges, including bribery, a month after she was fired as president by the top court in March.
A verdict in her case is expected in the next couple of months.
Liberal politician Moon Jae-in was elected the new president in May.