SSNHZ Samsung Electronics Company Ltd (PK)

By Timothy W. Martin 

SEOUL--South Korea's Supreme Court will rule Thursday on cases involving Samsung's de facto leader and the country's imprisoned former president, two proceedings that intersect in a bribery scandal that shook the nation.

The country's highest court will issue a ruling on the separate, though intertwined, cases of Lee Jae-yong, the 51-year-old grandson of Samsung's founder, and former President Park Geun-hye, 67, the conservative daughter of a past dictator. Both face a variety of charges, though the central matter revolves around the Samsung scion's bribes to Ms. Park.

The two cases, which were previously heard in lower courts, are the most high-profile legal proceedings in an influence-peddling affair that rocked South Korea starting in late 2016. A populist backlash toppled Ms. Park's government.

The Supreme Court will decide by a majority vote whether to send either case back to an appeals court for a new hearing or uphold the appeal court's earlier decision. For Mr. Lee, the appeals court's ruling sprung him from prison after nearly a year behind bars, reducing his original five-year sentence to a suspended sentence. Ms. Park is appealing a 25-year prison term and a fine of roughly $16.5 million.

Both have previously denied wrongdoing and pleaded not guilty.

If the Supreme Court sends the case back, Mr. Lee could again face imprisonment if he loses. The earlier appeals-court decision in February 2018, surprised many legal experts, as the judge added up Mr. Lee's bribes differently from other related cases, including Ms. Park's.

Samsung, one of the world's largest business enterprises, spans dozens of affiliates selling life insurance, consumer electronics and biopharmaceuticals. Each has its own CEO and management team. But major strategic shifts or large mergers can't proceed without Mr. Lee's signoff, a vestige of South Korea's family-run conglomerate system.

Samsung has faced significant challenges recently, as its home country spars with Japan in a trade fight that threatens core business lines. The U.S.-China trade war has reduced consumer spending globally.

Ms. Park, who in 2013 became the country's first female leader, is one of four South Korean presidents to spend time behind bars. Across three cases, she has been convicted of coercion, abuse of power and taking off-the-books payment from South Korea's spy agency, among more than a dozen other charges.

The Supreme Court ruling is expected to focus on three meetings between Ms. Park and Mr. Lee starting in late 2014.

Mr. Lee needed government support--including a swing vote by the country's national pension--to seal a deal that would cement his grip on Samsung Electronics, prosecutors said. Two Samsung affiliates were merging, but foreign shareholders were vehemently opposed.

Ms. Park's predecessors have also faced legal problems. Two former military-backed presidents who ruled South Korea from 1980 to 1993, were imprisoned over treason and corruption, though received pardons. Lee Myung-bak, who served from 2008 to 2013, spent nearly a year in jail over corruption charges before posting bail earlier this year.

All 13 judges in South Korea's Supreme Court are expected to attend Thursday's hearing, local media reported. Eight of them were appointed by Moon Jae-in, the country's left-leaning president who took office in May 2017 after winning a snap election following Ms. Park's ouster.

Na-Young Kim and Eun-Young Jeong contributed to this article.

Write to Timothy W. Martin at timothy.martin@wsj.com

(END) Dow Jones Newswires

August 29, 2019 00:03 ET (04:03 GMT)

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