Samsung pardon exposes Koreans’ love-hate feelings for tycoons

Lee Jae-yong is the latest in a long list of South Korean business elites to receive clemency after white-collar crimes.

Lee Jae-yong, the de facto leader of Samsung, South Korea’s largest conglomerate,
Lee Jae-yong, the de facto leader of Samsung, is the latest South Korean business tycoon to receive a presidential pardon [File: Chung Sung-Jun/Reuters]

Seoul, South Korea – When US President Joe Biden visited South Korea in May, his first stop was a massive Samsung Electronics semiconductor plant south of Seoul.

Acting as Biden’s tour guide was Lee Jae-yong, the de facto leader of Samsung, South Korea’s largest conglomerate, which has ramped up production of the chips in recent years to maintain an edge in the fiercely competitive sector.

The optics of the visit were key for Lee, who, like many South Korean business tycoons, has a chequered past. Appearing with Biden was part of a process of rehabilitating Lee’s image following a criminal conviction, analysts say.

That process culminated in South Korean President Yoon Suk-yeol on Friday naming Lee among the recipients of a presidential pardon on the occasion of Liberation Day, which marks the end of Japan’s 1910-45 occupation of Korea.

Lee’s appearance at the factory, and the optics of a US president prioritising Samsung’s technology, “lessened the public’s anger at Samsung by highlighting its top-notch technology and dominance in the global market”, Kim Sei-wan, a professor of economics at Ewha Womans University in Seoul, told Al Jazeera.

Lee’s pardon was not unexpected. Presidents customarily grant pardons for the holiday, which falls on Monday, and in previous years business leaders found guilty of corruption or unfair business practices have been among those granted clemency. Lee’s late father, former Samsung chairman Lee Kun-hee, received presidential pardons twice.

This year’s list of pardonees included other high-profile business figures such as Kang Duk-soo, former chairman of trade and ship maintenance conglomerate STX Group, and Chang Sae-joo, chairman of Dongkuk Steel Mill Co.

Yoon Suk-yeol
South Korean President Yoon Suk-yeol has said he hopes the latest round of pardons for people with criminal convictions will help the country overcome its economic difficulties [File: SeongJoon Cho/Bloomberg]

In advance of the formal announcement on Friday, Yoon, the standard bearer for the conservative People Power Party, said he hoped the pardons would be an “occasion for all of our people to come together and overcome the economic crisis” sparked by the COVID-19 pandemic.

Samsung’s Lee was handed a five-year jail term in 2017 after being convicted of bribing Park Geun-hye, the then-president, as part of a sprawling corruption scandal that shook the country and led to Park’s removal from office.

Lee served 19 months in prison before being paroled last year. The pardon is significant as it removes any strictures on what role Lee can play within the company and could pave the way for him to formally assume the position of chairman of Samsung Group.

Samsung has tentacles that spread throughout South Korea’s economy and is the largest employer, leading many in the country to see it as more than just another company, but as something of a national icon.

It is the world’s top maker of memory chips and is working hard to compete with semiconductor leader Taiwan Semiconductor Manufacturing Co in the foundry sector.

‘Positive impact on the economy’

Proponents of Lee’s pardon hailed the decision as due recognition of Samsung’s role as a key player in the global competition for chip supremacy, and of the industry’s importance to South Korea’s export-driven economy.

“Since Samsung’s main businesses, such as semiconductors, require huge and risky investments, timely decisions by the top leader are important,” said Kim, the professor. “In this respect, the pardon can have a positive impact on the economy.”

In a July poll conducted by current affairs magazine Sisain, 69 percent of respondents said they would support a pardon for Lee.

Sisain attributed the strong support for clemency to a public perception that, as leader of the country’s flagship company, Lee contributes to the economy.

When Samsung patriarch Lee Kun-hee received his second presidential pardon in 2009 following convictions for embezzlement and tax evasion, then-President Lee Myung-bak justified the decision as necessary to allow the businessman participate in South Korea’s bid to host the 2018 Winter Olympics.

Former President Lee, who is no relation of the Samsung family, was himself later jailed on corruption charges and had been an unsuccessful candidate for the latest round of pardons.

Samsung logo on a glass window.
Samsung is South Korea’s largest employer, leading many in the country to see the company as something of a national icon [File: Jo Yong-Hak/Reuters]

To detractors, Samsung’s continual ability to shirk accountability for serious crimes sends a dangerous message to the leaders of the conglomerates that dominate the economy.

“Pardons do weaken the rule of law, and they do make conglomerate leaders seem like they’re beyond the law,” Yang Junsok, a professor of economics at Catholic University, told Al Jazeera.

One Samsung Electronics workers’ association released a statement decrying the pardon on the grounds that granting Lee clemency amounts to a tacit endorsement of the company’s anti-union stance.

“What the pardon of Lee Jae-yong symbolizes is the completion of Samsung’s whitewashing strategy that overturns punishment of those responsible,” the group said in a statement.

With Lee now a free man, South Koreans are waiting to see if there will be any economic windfall. In a statement on Friday, Lee said he would honour the consideration shown by the government and the public and “contribute to the economy with continuous investment and job creation”.

Yang said, at least in the short term, Lee would make moves that create the impression of boosting South Korea’s economy.

“Lee will either be morally or feel obligated to do something that can improve the economic situation, so he might need to go ahead with investments that Samsung has promised,” Yang said.

A bridge is submerged by torrential rain of the previous day at Han river in Seoul, South Korea, August 9, 2022
South Korean President Yoon Suk-yeol’s popularity has dived amid a series of challenges, including floods that led to more than a dozen deaths [File: Reuters]

In pardoning Lee, Yoon, a career prosecutor, may have been trying to create positive economic momentum, however moderate. Just three months into his term, Yoon’s administration has been plagued by scandal and mishaps. Early this month, his approval dipped to 29 percent, down from 44 percent in June.

After entering office with no prior political experience, Yoon’s early performance has validated some critics’ concerns that he was unprepared for the country’s top job.

His pick for education minister recently resigned after the announcement of a policy to lower the starting age of school by one year sparked sustained backlash and, this week, he issued a public apology after heavy rains in Seoul caused massive flooding that led to more than a dozen deaths.

While facing general pressure, Yoon is unlikely to catch too much flak for his decision to pardon the Samsung scion, analysts say.

“Lee’s pardon is in line with South Korean business tradition,” Geoffery Cain, author of “Samsung Rising” and a senior fellow for critical emerging technologies at the Lincoln Network, told Al Jazeera.

Previous presidents, notably Yoon’s predecessor Moon Jae-in, made pronouncements about reducing the power of Samsung and other corporations, but ultimately acceded to their primacy in South Korean business.

“Korean leaders made many attempts to lessen their power or dismantle the conglomerates, but all failed because they were so integral to the economy,” said Cain. “Their vertical integration means they control the entire supply chain from raw materials to the finished chips, ships and products.”

“The chaebol might engage in corruption and abuse of power,” he added, “but they’re stable, strong and can withstand economic shocks.”

Source: Al Jazeera