By Sean Choi, Staff Member

On February 5, 2018, the South Korea Appeals Court reversed the lower court’s decision, letting the heir of Samsung, Jay Y. Lee, walk free out of jail.[1] The decision frustrates many South Koreans who believed that putting one of the most powerful businessman in jail would be an important milestone in Korea’s progress into greater transparency. After the decision, people started to question the credibility and consistency of South Korean Judiciary system. What caused the judiciary to reach this decision, however, is not clear.

Surprisingly, South Korea’s Prosecution has a long history of successfully prosecuting corporate executives in the top of the management chain.[2] Considering the size and number of big, multinational corporations in South Korea, the prosecution’s success in going after ‘the big shots’ is remarkable. The successful prosecution rates especially stand out when compared to that of the United States, where not a single high-level executive has been prosecuted in connection with the financial crisis in 2008.[3]

However, many corporate executives ended up serving light sentences, rendering the successful prosecution rates meaningless. What thwarted the prosecution’s effort has always been the practice of presidential pardons, which has let most convicted executives walk out of jail after serving just a few months.[4] The President pardons corporate executives usually in the name of public welfare, namely “economic revival,” “job creation,” and “investment stimulus.”[5]

[1] Sam Kim, Samsung’s Jay Y. Lee Set Free in Unexpected Court Reversal, Bloomberg (Feb. 5, 2018), https://www.bloomberg.com/news/articles/2018-02-05/samsung-heir-jay-y-lee-goes-free-after-court-suspends-jail-term.

[2] See Sohee Kim, Lotte Ruling Extends List of Convictions for Korea Inc. Chiefs, Bloomberg (Feb. 13, 2018), https://themalaysianreserve.com/2018/02/14/lotte-ruling-extends-list-convictions-korea-inc-chiefs/

[3] Jennifer G. Chawla, Comment: Criminal Accountability and Wall Street Executives: Why the Criminal Provisions of the Dodd-Frank Act Fall Short, 44 Seton Hall L. Rev. 937, 948; Marianne M. Jennings, A Primer on Enron: Lessons from a Perfect storm of Financial Reporting, Corporate Governance and Ethical Culture Failures, 39 Cal. W. L. Rev. 163, 262n.35 (2003).

[4] Sherisse Pham, South Korea’s Long History of Light Sentence for Business Leaders, CNN Money (Jan. 17, 2017), http://money.cnn.com/2017/01/17/investing/south-korea-chaebol-culture-corruption/index.html.

[5] Felicia Istad, Presidential Pardons in South Korea: Analysis of Quantitative and Qualitative Trends, 9 Yonsei J. Int’l Stud. 16, 25 (2017)