Seoul, South Korea – When US President Joe Biden visited South Korea in May, his first stop was a massive Samsung Electronics semiconductor factory south of Seoul.
Acting as Biden’s tour guide was Lee Jae-yong, the de facto leader of Samsung, South Korea’s largest conglomerate, which has ramped up chip production in recent years to maintain an edge in the fiercely competitive sector.
The optics of the visit were key for Lee, who, like many South Korean business tycoons, has a checkered past. The outing with Biden was part of a process to rehabilitate Lee’s image after a criminal conviction, analysts say.
That process culminated when South Korean President Yoon Suk-yeol on Friday named Lee among the recipients of a presidential pardon to mark Liberation Day, which marks the end of Japan’s 1910-1945 occupation of Korea. .
Lee’s appearance at the factory, and the optics of a US president prioritizing Samsung’s technology, “reduced public anger at Samsung by emphasizing its high-end technology and global market dominance,” Kim Sei-wan, professor of the economy in Ewha. Womans University in Seoul, told Al Jazeera.
Lee’s pardon was not unexpected. Presidents usually grant pardons for the holiday, which falls on Monday, and in previous years business leaders found guilty of corruption or unfair business practices have been among those granted clemency. Lee’s late father, former Samsung chairman Lee Kun-hee, received presidential pardons twice.
This year’s list of pardons included other high-profile business figures such as Kang Duk-soo, former chairman of ship trading and maintenance conglomerate STX Group, and Chang Sae-joo, chairman of Dongkuk Steel Mill Co.
Before the official announcement on Friday, Yoon, the standard bearer of the conservative People’s Power Party, said he hoped the pardons would be an “occasion for all our people to come together and overcome the economic crisis” caused by the COVID-19 pandemic.
Samsung’s Lee was sentenced to five years in prison in 2017 after being convicted of bribing then-president Park Geun-hye as part of a wider corruption scandal that rocked the country and led to Park’s ouster.
Lee served 19 months in prison before being released on parole last year. The pardon is significant as it removes any restrictions on what role Lee can play within the company and could pave the way for him to officially take over as chairman of the Samsung Group.
Samsung has tentacles that stretch across South Korea’s economy and is the largest employer, leading many in the country to see it as more than just another company, but something of a national icon.
It is the world’s largest maker of memory chips and is working hard to compete with semiconductor leader Taiwan Semiconductor Manufacturing Co in the foundry sector.
‘Positive impact on the economy’
Supporters of Lee’s pardon hailed the decision as due recognition of Samsung’s role as a key player in the global race for chip supremacy and of the industry’s importance to South Korea’s export-led economy.
“Since Samsung’s core businesses, such as semiconductors, require large and risky investments, timely decisions by the top leader are important,” said Kim, the professor. “In this respect, forgiveness can have a positive impact on the economy.
In a July poll conducted by the current affairs magazine Sisain, 69 percent of respondents said they would support a pardon for Lee.
Sisain attributed the strong support for clemency to a public perception that, as the head of the country’s top company, Lee contributes to the economy.
When Samsung patriarch Lee Kun-hee received his second presidential pardon in 2009 after convictions for embezzlement and tax evasion, then-President Lee Myung-bak justified the decision as necessary to allow the businessman to participate in the bid South Korea to host the 2018 Winter Olympics.
Former president Lee, who is unrelated to the Samsung family, was later jailed on corruption charges and had been an unsuccessful candidate for the latest round of pardons.
For opponents, Samsung’s continued ability to avoid responsibility for serious crimes sends a dangerous message to the leaders of the conglomerates that dominate the economy.
“Pardons weaken the rule of law and they make conglomerate leaders look like they are above the law,” Yang Junsok, an economics professor at Catholic University, told Al Jazeera.
A Samsung Electronics workers’ association issued a statement condemning the pardon on the grounds that granting Lee clemency amounted to tacit approval of the company’s anti-union stance.
“What Lee Jae-yong’s pardon symbolizes is the end of Samsung’s whitewashing strategy that overturns the conviction of those responsible,” the group said in a statement.
With Lee now a free man, South Koreans are waiting to see if there will be any economic windfall. In a statement on Friday, Lee said he would honor the consideration shown by the government and the public and “contribute to the economy with continued investment and job creation”.
Yang said, at least in the short term, Lee would make moves that give the impression of boosting South Korea’s economy.
“Lee will either be morally or feel compelled to do something that can improve the economic situation, so he may need to continue with the investments that Samsung has promised,” Yang said.
In Lee’s pardon, Yoon, a career prosecutor, may have tried to create a positive economic momentum, however moderate. Just three months into his term, Yoon’s administration has been plagued by scandals and disasters. Earlier this month, his approval rating fell to 29 percent, down from 44 percent in June.
Having entered office with no prior political experience, Yoon’s early performance has confirmed some critics’ concerns that he was unprepared for the country’s top job.
His pick for education minister recently resigned after announcing a policy to lower the school starting age by a year sparked a backlash and, this week, he issued a public apology after heavy rains in Seoul caused massive flooding. which led to more than a dozen deaths.
As he faces general pressure, Yoon is unlikely to catch much fire for his decision to pardon Samsung’s successors, analysts say.
“Lee’s apology is in line with South Korean business tradition,” Geoffery Cain, author of “Samsung Rising” and a senior fellow for critical emerging technologies at Lincoln Network, told Al Jazeera.
Previous presidents, notably Yoon’s predecessor Moon Jae-in, made statements about reducing the power of Samsung and other corporations, but eventually conceded their primacy in South Korean business.
“Korean leaders made many attempts to reduce their power or dismantle conglomerates, but they all failed because they were so integral to the economy,” Cain said. “Their vertical integration means they control the entire supply chain from raw materials to finished chips, ships and products.”
“Caebol may engage in corruption and abuse of power,” he added, “but they are stable, strong and can withstand economic shocks.”