Jay Y. Lee, Samsung Leader Facing ‘Trial of the Century,’ Denies Charges

Jay Y. Lee, Samsung Leader Facing ‘Trial of the Century,’ Denies Charges

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Lee Jae-yong, who also goes by Jay Y. Lee, in Seoul, South Korea, last month. He is accused of a range of crimes, including funneling $36 million in bribes to a confidante of the president.

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Jung Yeon-Je/Agence France-Presse — Getty Images

Five executives at Samsung, including the conglomerate’s de facto leader, Lee Jae-yong, formally denied bribery charges against them on Thursday, in a preliminary hearing for a trial with the potential to shake South Korea.

Mr. Lee, who also goes by the name Jay Y. Lee, and the other executives face charges that strike at the heart of the deep ties between the South Korean government and powerful family-controlled businesses, a source of growing public resentment. Parliament voted in December to impeach President Park Geun-hye over accusations of corruption and other abuses of power, and she could be formally removed from office soon.

But the related arrest of Mr. Lee, scion of the country’s biggest and most profitable conglomerate, or chaebol, is a momentous turn in itself. Chaebol bosses, including Mr. Lee’s father, have been convicted in previous corruption cases, but punishments have usually been light or commuted.

Many see Mr. Lee’s trial as a test of whether South Korea can change by abandoning longstanding deference to the business clans that have dominated the country’s glittering economic rise. The chief prosecutor has said it could be the “trial of the century.”

Mr. Lee is accused of funneling $36 million in bribes to a secretive confidante of Ms. Park’s, as well as a range of other crimes: embezzlement, illegal transfer of property abroad and perjury before Parliament. He and the other executives, who are accused of aiding Mr. Lee, did not appear in court for the preliminary hearing on Thursday, but they denied the charges through lawyers.

Prosecutors say Mr. Lee sought a particularly South Korean favor in return: Approval for a merger that cemented his family’s hold over the sprawling Samsung group, a vast and complex network of companies whose interests range from cellphones to shipbuilding.

The merger, of two Samsung affiliates, took place in 2015 and helped Mr. Lee, now 48, inherit corporate control from his father, Lee Kun-hee, who remains Samsung’s chairman but has been out of the public eye since falling ill in 2014. The elder Mr. Lee has been convicted of corruption charges twice but was pardoned both times.

South Koreans are losing patience after years of chaebol-related corruption scandals. When crowds took to the streets in recent months to demand Ms. Park’s impeachment, they also called for the arrest of Mr. Lee and other business leaders. That may have emboldened the special prosecutor, Park Young-soo, who had been struggling to build criminal cases against Mr. Lee and Ms. Park. Prosecutors have named Ms. Park as an accomplice in Mr. Lee’s case, most recently in a report issued on Monday about Mr. Lee’s indictment.

Prosecutors say bribes Samsung made to members of Ms. Park’s circle took many forms, including a $900,000 horse for the equestrian daughter of the president’s confidante, Choi Soon-sil.

The preliminary hearing on Thursday attracted a modest crowd of onlookers, reporters and people with grievances against Samsung, a symbol both of national pride and, for many South Koreans, unfair elite privilege.

“There is a saying in Korean that goes, ‘Guilty without money, and not guilty with money,’ ” said Koh Hyun-sook, 53, who added that her husband was fighting a disability case against a Samsung company.

The hearing largely addressed the kind of evidence that would be allowed at the trial. Lawyers for Mr. Lee and other executives said prosecutors had overstepped the bounds of the case by contending that Samsung was engaged in a long-term, covert effort to ensure the Lee family succession.

It remains unclear when the main trial will begin. The judge scheduled the next preliminary hearing for March 23.

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