Samsung's Jay Y. Lee given 5-year jail sentence for bribery

The vice chairman of Samsung Electronics has been given a five-year jail sentence over illegal payments for South Korea’s former President Park Geun-hye.

Jay Y. Lee, also known as Lee Jae-yong, 49, was sentenced at the Seoul Central District Court on Friday.

The billionaire was found guilty of bribery, perjury and other charges related to payments Samsung made to Park's secret confidante Choi Soon-sil.

In total, 8.9 billion won (about $7.9 million) was paid in bribes in return for favors, including the government's support for Lee's hereditary succession at Samsung, after his father was left bedridden by a heart attack in 2014, the court found.

Lee had denied the charges, but presiding Judge Kim Jin-dong said, "He offered bribes in response to strong demands by the president."

Four other top Samsung executives were also convicted. Two of them were jailed for up to four years, and the other pair was given suspended terms.

Supporters demonstrating outside the court broke down in tears while Lee's lawyers said they would appeal "immediately." Lead attorney Song Wu-cheol said he "cannot possibly accept" the court's "interpretation of law and finding of facts."

Samsung is by far the biggest of the family-controlled conglomerates that dominate South Korea, with its revenues equivalent to about a fifth of the country's gross domestic product, or the GDP.

Lee's father Lee Kun-hee was convicted of tax and other offenses in 2008. He received a suspended sentence.

Lee has been Samsung's de facto leader since his father fell ill and the sentence leaves the conglomerate facing an extended vacuum at its highest level, but analysts differ on its impact.

Analyst Chung said with Lee in prison the firm "may move more slowly than before."

Geoffrey Cain, the author of a forthcoming book on the group, however, said, "Samsung will not be doomed without Jay Lee. It's up to the specialists to make their own decisions."

Credit rating agency Fitch said it did not expect the conviction "to significantly disrupt the day-to-day operations of Samsung Electronics" or "negatively affect" its A+/stable credit profile.

Fitch added that "it could increase longer-term business risks by delaying necessary strategic decisions and major investment plans."

The conglomerate appears to have been unaffected by Lee's absence so far, he was detained in custody in February, with flagship subsidiary Samsung Electronics making record profits on the back of a strong demand for its memory chips.

"Samsung Electronics has a strong management team currently in place, led by its three co-CEOs," the company said in a statement.

Samsung apartment buildings are shown before the city skyline of Seoul, South Korea, August 25, 2017. (Photo by AFP)

"This team has delivered superior performance and will endeavor to lead our operations without disruptions" from what it called "the ongoing legal process."

The convictions suggest that the ousted president Park, who is in custody and faces 18 counts including coercion, abuse of power and bribery at her trial with Choi, is likely to be found guilty. Park has denied wrongdoing and blamed Choi for abusing their friendship.