South Korean president pardons Samsung heir to ease 'economic crisis'

South Korea's new conservative President Yoon Suk-yeol has pardoned Samsung Electronics Vice Chairman Jay Y. Lee, with the country's justice ministry saying the business leader was needed to help overcome a "national economic crisis."

"With urgent needs to overcome the national economic crisis, we carefully selected economic leaders who lead the national growth engine through active technology investment and job creation to be pardoned," Justice Minister Han Dong Hoon said at a press briefing on Friday.

The pardon, however, is seen as symbolic, with Lee already out on parole after serving 18 months in jail on bribery charges linked to his tenure at Samsung, the world's largest smartphone and memory-chip maker.

Even before receiving the presidential pardon, Lee had drawn public attention back in May, when he appeared with President Yoon and US President Joe Biden when they visited Samsung's Pyeongtaek chip production facilities.

Last November, Samsung picked the US city of Taylor in the southern State of Texas as the site of its new $17 billion chip plant.

The convicted South Korean business leader also visited Europe in June to meet ASML Holding NV CEO Peter Wennink, discussing the adoption of key high-end chip equipment.

According to analysts cited in media reports, the high-profile pardon will allow Lee to carry out business activities more freely, which can facilitate a number of major investments by the company, according to analysts.

Welcoming the decision by the South Korea’s top judiciary official, Lee vowed to work hard for the national economy in a statement issued by Samsung.

"I will contribute to the economy with continuous investment and job creation and give back the people and government's regards," said the statement.

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President Yoon also pardoned Lotte Group chairman Shin Dong-bin, who was sentenced to a two-and-a-half-year prison sentence, also on bribery charges.

"We sincerely thank the government's and people's decision to grant pardon, and Chairman Shin Dong-bin and staff members at Lotte will contribute to overcoming the complex global crisis," Lotte declared in a statement.

The development came as tech and export-dependent South Korea is struggling with soaring inflation and signs that Asia's fourth-largest economy is facing weakening demand, poor sentiment and slowing spending.

Industry analysts have long anticipated decisions on major M&A projects and investments once Lee was reinstated in Samsung, with company sources cited as insisting that such decisions should only be made by Lee.

However, Lee’s legal troubles still linger due to an ongoing trial in which he also faces fraud and stock manipulation charges, local news outlets reported.

"With his trial, Lee could face a fresh jail term if convicted. However, the presidential pardon gives him some flexibility to handle big management issues for now," said Lee Kyungmook, a professor at Seoul National University's Graduate School of Business, as quoted in press reports.

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