Samsung has dismissed reports about a crypto function in its new Galaxy phones as 'rumour and speculation'. Photo: Reuters
Samsung has said earnings may be down. Photo: Reuters

As emotionally satisfying as it may be, the guilty verdict against Samsung Group’s Jay Y. Lee doesn’t matter.

Well, it does matter in the sense that the de facto leader of the conglomerate that generates 20% to 25% of South Korean gross domestic product just got sentenced to five years in jail.

Bad enough that Samsung Chairman Lee Kun-hee has been hidden away in a hospital for more than three years. It’s even worse that his son and heir apparent is off to prison.

Or is he really? To my original point, is this the typical Seoul two-step whereby Jay Y. Lee will cool his heels in a country-club security facility awaiting a pardon?

That’s his father’s story — Lee Sr.’s bribery conviction was pardoned in 2010 and he was back at the office soon after — and a it’s narrative that Seoul needs to end immediately.

There’s reason to think newish President Moon Jae-in won’t go easy on Jay Y. Lee.

There’s reason to think newish President Moon Jae-in won’t go easy on Jay Y. Lee.

Moon has talked tough about curbing the towering influence and excesses of family-run conglomerates called “chaebol,” of which Samsung is the biggest.

If the going gets tough, will Moon double down like predecessors on the Korean model with the chaebol at the center?

If, say, China’s economy hit a wall or Donald Trump’s incompetence slammed world markets, might Moon revert to the mean? Moon’s predecessor, the now imprisoned Park Geun-hye, is a case in point.

She entered office in February 2013 pledging to build a “creative” economy that generates jobs and income from the ground up, not just the top-down.

In other words, taking the monopolistic chaebol down a few pegs to give smaller enterprises greater space to thrive. Diversifying the economy away from a dozen giants is vital to increasing innovation, productivity, competitiveness and raising wages for households struggling under record debt.

Instead, Park reverted to the mean. First, she asked Samsung and other chaebol to help her stimulate growth. The quid pro quo: you help me now, and I won’t break you up, impose new taxes or sic my antitrust attack dogs on you. Next, she allegedly shook them down, through an emissary, for about $70 million.

It’s Jay Y. Lee’s alleged role in Park’s downfall that has him going away, too.

And for Samsung shareholders, Lee’s defense is anything but comforting. Borrowing a page from US President Trump explaining his team’s Russia contacts, Lee colored himself as an aloof leader uninvolved with key corporate decisions.

The Samsung chairman dad out of sight and the son claiming he’s a naïf doesn’t seem a recipe for investor confidence.

The chairman dad out of sight and the son claiming he’s a naïf doesn’t seem a recipe for investor confidence.

The cooption of Park disappointed reformers who viewed her as an ideal bookend to close out the chaebol era. Her father, dictator Park Chung-hee, championed the creation of the chaebol system in the 1960s and 1970s.

It seemed vaguely poetic that Park Chung-hee’s daughter would be the president who dismantled a system that precipitated Korea’s collapse during the 1997 Asian crisis. Well, not so much.

Moon is a far more liberal politician than Park; he’s a mentee of former President Roh Moo-hyun (2003-2008). This week also brought an encouraging sign that Moon will do Park’s job for her.

Korea’s new antitrust chief disclosed he’s talking with Hyundai about its opaque and convoluted ownership structure. It could be a harbinger of bolder action to come.

An equally important step, though, is resisting the urge to pardon Lee, 49. It’s hard to quibble with the Seoul Central District Court’s five-year term on bribery, perjury and embezzlement charges.

Given the seriousness of Lee’s infractions, one could argue he’s getting off easy (prosecutors wanted 12 years). Nothing would communicate more loudly that true change has arrived than letting Lee’s conviction stand. That’s what matters most now.

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