Lee Jae-yong was freed nearly a year after he was jailed on corruption charges, a big relief for Samsung, South Korea’s largest conglomerate © AP

Samsung’s de facto leader was set free from prison on Monday, five months after he was convicted on corruption charges, setting back hopes of reformers that Seoul had turned a corner in taking on its powerful chaebol conglomerates.

Lee Jae-yong was released after a South Korean appeals court halved the billionaire heir’s sentence to two-and-a-half years and suspended it for four years, allowing him to walk free immediately.

The appeals court said Samsung had not sought any favours from then-South Korean president Park Geun-hye. Prosecutors had claimed Mr Lee bribed Ms Park to win government backing for efforts to strengthen his control over the sprawling empire.

The trial of Mr Lee, who was charged with a host of graft charges, was seen as a test case in the government’s efforts to clean up Korea Inc, which has long been controlled by handful of large family-run industrial groups.

Opposition politicians and governance critics said the release of Mr Lee, who is vice-chairman at Samsung Electronics and the group’s heir apparent as grandson of its legendary founder, was a major setback for the reform efforts.

“It is regrettable to see the judiciary going back to the past, with no real changes made in the problematic business practices of corporate Korea,” said Chung Sun-seop, head of corporate analysis group Chaebul.com.

The ruling enables Mr Lee to return to management and continues the judiciary’s tendency to be lenient towards white-collar crimes committed by chaebol tycoons. The court put the blame for the bribe offers on Ms Park, who was impeached in the sprawling year-long anti-corruption case, and dismissed prosecutors’ claim that Mr Lee hid assets abroad.

“This is a case where Ms Park intimidated Samsung’s management and her friend pursued personal interests,” the court said in the ruling. “The defendant passively offered bribes because he could not easily turn down their request.”

Mr Lee is expected to speed up the process to succeed his ailing father, chairman Lee Kun-hee, who has been incapacitated since a heart attack in 2014. 

“Now that he is free, Mr Lee will try hard to sort out various issues related to his succession and inheritance,” said Mr Chung. “He will also accelerate Samsung’s efforts to overhaul its governance.”

Mr Lee, who has always denied any wrongdoing, apologised after the verdict. “I am sorry again that I have not been able to show my good aspects,” he told reporters. He said the past year in jail had given him time to reflect and that now he “will look after things more carefully”.

Samsung welcomed the ruling, which comes as the company is striving to repair a corporate image bruised by Mr Lee’s involvement in the scandal and exposed corrupt ties between government and big business. 

Shares in Samsung Electronics erased earlier losses to close up 0.5 per cent, while the broader market fell 1.3 per cent.

Because he was not cleared of all the bribery charges, his lawyer said Mr Lee would appeal the ruling to the supreme court. It is likely to be more than six months before there is a final decision.

The opposition People’s party said: “It is questionable whether the public can accept the ruling, which basically says that Samsung has provided billions of won to Ms Park for nothing in return. You are guilty if you have no money. You are not guilty if you have money.” 

Despite Mr Lee’s absence, the company has continued to enjoy record earnings, surpassing Intel as the world’s largest chipmaker. But signs of a faltering chip cycle have weighed on its shares recently amid slowing sales of smartphones and display panels. 

Samsung said it would continue to reform its corporate culture. It has announced measures over the past year to appease investors, including sharp increases in shareholder returns. It also plans to appoint independent outside directors at the annual shareholders’ meeting in March, to better reflect the interests of minority shareholders.

South Korea has a long history of presidents pardoning convicted executives of companies deemed too big to fail. Most recently, Ms Park in 2015 freed Chey Tae-won, chairman of SK Group, who was convicted of embezzlement. However, experts do not expect Mr Lee to be pardoned by President Moon Jae-in, whose administration has vowed to abolish such practices.

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