Samsung Electronics Vice Chairman Lee Jae-yong on Monday appealed the verdict that sentenced him to five years in jail over bribery charges, with the tech giant contending the absence of the heir has brought “an unprecedented crisis.”

The Seoul Central District Court said legal representatives of Lee had submitted a petition to appeal, claiming that the ruling on Friday had a juridical error and misunderstanding of facts.


 

The 49-year-old heir to the nation’s largest conglomerate was found guilty on five charges including bribery, embezzlement and capital flight offenses over his involvement in a corruption scandal that ousted the nation’s former leader. Though the vice chairman and ex-President Park Geun-hye did not specifically ask each other for favors during their clandestine meetings, he was aware of her close relationship with Choi Soon-sil, the court said. Based on his knowledge of their relationship, Lee and other Samsung executives had offered financial assistance to Choi’s horse-riding daughter, constituting criminal activity, it added.

Lee is said to have expressed his disappointment in an interview with a correctional officer after he returned to a detention center in Gyeonggi Province, Friday. The interview was a customary procedure for a convicted prisoner, according to an official at the Justice Ministry. “I had contemplated receiving a jail term, but I was also expecting for an acquittal,” Lee was quoted as saying.

On Monday, top Samsung executive urged employees to remain calm until they “reach the moment of truth.” So far, Samsung has kept silent on Lee’s trial, refraining from making any official comments.

“I believe that you all are in great grief and we in the management also feel devastated,” said Kwon Oh-hyun, vice chairman of Samsung Electronics, in an email sent to Samsung employees.

“To overcome (this) unprecedented crisis, we all have to gather our power and wisdom … (I feel) really concerned of this uncertain situation, but we all have to wait until the truth is discovered.”

Kwon is the head of Samsung Electronics’ thriving chip business and also serves as the head of the boardroom. Since Lee was detained in February, Kwon has been representing the tech giant, internally and externally, a role that the heir had played since his father’s illness. Chairman Lee Kun-hee has been incapacitated after a severe heart attack in 2014.

Meanwhile, attention has also shifted to Lotte Group, whose Chairman Shin Dong-bin risks penalties as he is also indicted for offering bribes to the former president’s longtime friend. Samsung and Lotte are the two out of 12 chaebol groups involved, indicted by the special counsel.

The special counsel, after last week’s victory, remains confident on Shin’s case that Lotte had the goal of gaining Park’s support when he had meetings with her, including an alleged request to revive the retail giant’s lucrative duty-free license.

Lotte, on the other hand, is reportedly paying attention to the court’s judgement on Friday that excluded Samsung’s financial assistance to organizations set up by Park’s friend, Choi, from the list of bribes. Lotte had offered a combined 7 billion won to Choi’s organizations but the funds were later returned.

However, some legal experts suggest that the focal point of Shin’s trial will be whether he was aware of Park’s secretive ties to Choi, and provided money in exchange of business favors.

Lotte Group, after an ugly family feud over management rights that laid bare the retailer’s enigmatic governance structure, has been gearing up for structural restructuring.

The group’s four affiliates, including Lotte Shopping, are set to hold shareholders’ meeting on Tuesday to establish a holding company. If approved, Lotte will officially start to operate under a holding company structure on Oct. 1, around the time Chairman Shin is to face the court’s verdict on charges of bribery.

By Cho Chung-un (christory@heraldcorp.com)