Will Lee Jae-yong's 'Employment Restriction' Also Be Lifted? All Eyes on the Special Economic Crimes Management Committee

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] With Lee Jae-yong, Vice Chairman of Samsung Electronics, who was imprisoned for the state corruption scandal, being granted parole, attention is now focused on the Special Economic Crimes Management Committee under the Ministry of Justice.

On the 10th, in business and legal circles, there is growing speculation that following the Ministry of Justice's decision to grant parole to Vice Chairman Lee, the Special Economic Crimes Management Committee will soon convene to deliberate whether to lift the employment restrictions imposed on him. Insiders expect Lee's side to soon request a review by the Special Economic Crimes Management Committee at the Ministry of Justice, asking for the lifting of employment restrictions imposed under the Act on the Aggravated Punishment of Specific Economic Crimes (Special Act).

Vice Chairman Lee was sentenced to 2 years and 6 months in prison by the Supreme Court in January for violating the Special Act (bribery and embezzlement). Accordingly, he is subject to Article 14 of the Special Act, which restricts employment for five years from the date the sentence is completed. This restriction remains effective even after parole.

Because of this, many view the parole as effectively 'half a measure.' For example, if Vice Chairman Lee wants to travel abroad on business, he must report in advance and obtain permission. Returning as a registered executive also requires separate approval from the Minister of Justice. Although limited management activities are possible as an unregistered executive, it is difficult for him to exercise authority on important company issues.

There are differing opinions on this matter. In business circles, some analyze that since Lee has worked as an unpaid unregistered executive since 2019 and retained the title of vice chairman even while imprisoned, the employment restriction does not apply. Progressive civic groups oppose this view. Public opinion is divided over the extent to which management activities should be recognized following parole. The controversy may intensify after Lee is released from detention on the 13th.

Due to these issues, many argue that additional measures equivalent to a pardon are necessary for Vice Chairman Lee. The Special Economic Crimes Management Committee is considered the most likely avenue.

If Lee's side requests the convening of the Special Economic Crimes Management Committee at the Ministry of Justice, the Ministry can convene the committee after assessing the necessity. The chairperson is the Deputy Minister of Justice, and the committee consists of 10 members: officials from seven government departments including the Ministry of Justice, Ministry of Strategy and Finance, Ministry of the Interior and Safety, Ministry of Trade, Industry and Energy, Fair Trade Commission, Financial Services Commission, and Supreme Prosecutors' Office, as well as three private experts such as accountants, lawyers, and professors. The meetings are held privately. The committee's conclusions are advisory and not binding. The final decision is made by the Minister of Justice, although Article 10 of the committee regulations stipulates that the Minister must respect the committee's opinions as much as possible.

Justice Minister Park Beom-gye also stated, "Considering the global economic situation, Vice Chairman Lee was included among those eligible for parole," adding, "The decision was made after comprehensively considering various factors such as public sentiment and behavior during detention." This is interpreted as meaning that parole was granted with the expectation that Lee's release from custody will have a positive effect on the Korean economy.

According to legal circles, the Special Economic Crimes Management Committee has a history of lifting employment restrictions on corporate heads. A representative case is Kim Jeong-su, CEO (President) of Samyang Foods. Kim was indicted for embezzling 4.9 billion won of company funds and was sentenced by the Supreme Court last January to two years in prison with a three-year suspended sentence. Two months after the sentence was finalized, Kim resigned from his CEO position and as a registered director candidate. Then, in October last year, the Special Economic Crimes Management Committee lifted Kim's employment restrictions, allowing him to return to the forefront of management. Kim's side applied for employment approval citing his significant influence on past company management and the enormous disadvantages the company would face due to the owner's absence, and obtained the committee's approval.

This content was produced with the assistance of AI translation services.