By
Mayowa Adebajo
April 10th, 2024
Notably, this is not the first time that Lee has been imprisoned by the South Korean justice system.
Stocks related to Samsung Group dipped on Monday after Seoul High Court sentenced Samsung Electronics Co Ltd (KRX: 005930) vice-chairman Jay Y. Lee for 30 months.
According to media outlet CNBC, shares of industry heavyweight Samsung Electronics fell 3.41%. after dipping more than 4% earlier in the session. Also, Samsung C&T’s stock dipped approximately 6.84%. Meanwhile, Samsung Life Insurance, Samsung SDI, and Samsung Heavy Industries dropped approximately 4.96%, 4.21%, and 2.74% respectively.
Notably, this is not the first time that Lee has been imprisoned by the South Korean justice system. He was previously convicted of bribery back in 2017 and imprisoned for five years. However, he was released a year later after his lawyers appealed.
Lee’s prior bribery case was connected with the downfall of former South Korean president Park Guen-Hye. Samsung Group is one of the most successful private companies that has diversified into different emerging markets.
Samsung and South Korea Relationship that Also May Influence the Stocks
The company anticipated Lee to be appointed as the new chairman after his father’s death. However, with his two and a half years imprisonment, uncertainties have aroused on who will take up the mantle.
TechCrunch previously reported that Lee was also convicted of stock manipulation and accounting fraud. His imprisonment is however lenient in comparison to Park’s 25-year term.
Samsung has been previously ranked among the top smartphone makers in terms of global shipments. The company has released cutting-edge devices back to back during the height of the coronavirus last year. Among them include 5G network-enabled mobile devices, and also a foldable screen smartphone. Most of these have enabled the company to remain relevant in the global smartphone industry despite the increasing competition from other companies including Huawei, and Apple Inc.
Lee’s legal team have blamed the former president for abuse of power and claimed the company’s right if freedom was denied. “In this case, a company’s freedom and right to wealth were violated due to the abuse of power by the former president,” Lee’s lead attorney said in a statement given by Samsung Electronics.
Samsung has continually been focused on by the South Korean government, particularly due to its huge market presence. The company has been accused of antitrust violations, whereby it was said to have knocked out smaller businesses in the country.
Samsung was noted to contribute over a fifth of South Korea’s total exports. Mind you, Samsung’s total revenue has been equated to approximately 17% of South Korea’s $1000 billion GDP. As a result, the company has a huge influence on the country’s political shape and also the country’s cultural heritage.