South Korean PM backs early return to work for paroled Samsung chief Lee Jae-yong

Lee Jae-yong updates

South Korea’s prime minister has backed calls for Samsung’s leader Lee Jae-yong to return to managing the global tech group weeks after being released from prison, despite laws banning convicted tycoons from returning to work for five years.

The billionaire head of the founding Lee family, which controls the world’s biggest producer of computer chips, smartphones and electronic displays, was released on parole after serving 19 months of his two-and-a-half-year sentence for bribing former president Park Geun-hye.

Kim Boo-kyum, the prime minister, told the Financial Times that the public believed that Lee’s leadership was required to steer South Korea’s biggest and most important company through intensifying global competition and the economic challenges wrought by the global pandemic.

“We should follow legal procedures if they are needed [for his return to management] but it is not an appropriate option to ban his activities when he has already been released [from jail],” Kim said, in the highest-level endorsement Lee has received.

The prime minister warned against a “narrow-minded” approach to Lee’s situation, despite acknowledging there was “criticism that the head of an economically influential company has been exonerated from his legal accountability too early”.

The immediate return of South Korea’s most famous businessman to the helm of his family’s empire is highly divisive locally, and is viewed by many critics as a crucial test of the rule of law in South Korea.

South Korean business groups have urged the government to relax Lee’s parole conditions that includes restrictions on overseas travel.

Lee’s supporters claim that under South Korea’s hierarchical business culture the company is unable to advance big long-term investments without the presence of its leader.

Critics, however, have already blasted Lee’s early release from prison. They argue that President Moon Jae-in’s administration has reneged on promises to bring South Korea’s family-controlled conglomerates, known as chaebol, to heel and end preferential treatment for the country’s most powerful business elite.

This month, civic groups and labour unions held rallies against Lee’s parole, saying the “too big to jail” mantra still held true for tycoons.

Kim, who leads the cabinet and supervises the government’s administrative affairs, defended South Korea’s legal system, citing the closer public scrutiny of the business practices of the chaebol and also pointed out the challenges that both Samsung and the Korean economy were facing.

“The Korean public has high standards for the role of chaebol now . . . but there is also a public opinion that it is unfair to deprive Lee of his business opportunities,” he said.

He added: “Excess privilege for second, third and fourth-generation tycoons is disappearing. Although it will take time, chaebol reform for better transparency and accountability is still going on.”

US companies also lobbied the president for Lee’s release from jail, the FT reported in May.

Samsung last week said it would spend more than $200bn over the next three years, building new factories and investing heavily in research and development. While almost all of the spending had been previously announced, the company also said its investments would create about 10,000 new jobs.

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