The bribery conviction and jailing of the heir apparent of the Samsung empire in Seoul demonstrates that this is very much business-not-as-usual in South Korea. It represents the potential untethering of the tight ties that have bound big business to the government since the conclusion of the Korean War in the 1950s.
The tycoon Lee Jae-yong, 49, has been sentenced to five years in prison for bribing his way, via the presidential graces, to a controversial merger that consolidated his power. He also perjured himself, the court ruled, when he told a parliamentary hearing that the payments were extorted out of him unwillingly. Lee has denied all the charges.
Lee, the third generation to lead the Samsung empire, has been running the conglomerate since his father suffered a heart attack that has left him in a coma. Samsung, the nation's best-known brand, had become so powerful in South Korea to have been above the law. To see its chief jailed sends the strongest possible message to corporate Korea that no one is untouchable anymore.
It's not unusual for Korea's corporate titans to be convicted of crimes such as tax evasion. In fact, Lee's father, Lee Kun-hee, was indicted for bribing the president in his own time in charge. He was slapped with a suspended sentence, then granted a pardon from the president. A decade later, he was indicted on charges of tax evasion and embezzlement. He was spared a jail cell and ultimately pardoned by the president again.
I'm not expecting the younger Lee to get the same presidential pardon this time around. The incumbent president, Moon Jae-in, leans to the left and ran on a ticket of corporate reform. He took office because his predecessor, Park Geun-hye, was impeached in the same scandal that has ensnared Lee. And he has a public mandate for sweeping change.
The importance of Samsung to the Korean economy cannot be overstated. It is by far the country's best-known company, the flag carrier of Korean ingenuity. Combined, Samsung companies account for 15% of the country's entire economy, and 20% of its exports.
Samsung is also much more than just Samsung Electronics (SSNLF) , much more than just a mobile-phone maker. The company's sprawling operations include asset management, stock brokerage, life insurance, shipbuilding, hospitals, fashion, funeral homes and the best-known hotel in Seoul, Hotel Shilla.
It remains to be seen how the chaebol, as Korea's powerful conglomerates are known, handles the disruption. Its businesses are run by a team of seasoned career executives, with a deep bench. But the family has always had the final say and has always scoped out the company's long-term plans. Of course, those plans were undoubtedly abetted by the easy access that the Lees had to the highest ranks of political power -- channels now closed off.
Lee will no doubt continue to oversee his empire from his jail cell. But he appears weak now, at a time when critics questioned his own strength of vision for the company. Lee testified during the trial that he knew little about the inner working of his own companies.
He has appealed his conviction, which saw four other executives sent down. Their crime, the court decided, was paying $7.8 million in bribes to President Park's best friend, Choi Soon-sil, who orchestrated a series of "charitable" donations, exerting power behind the throne despite never having held any office.
This paid for the support of Korea's National Pension Service, the world's third-largest, in voting for the merger of Samsung C&T KR:028260 and another Samsung subsidiary, Cheil Industries, which used to be listed before the merger. Pension-service backing helped the merger gain approval, a move that gave Lee additional control of the company and likely came at the cost of stock holders.
Park, the former president, now faces a trial of her own, as does Choi. Like Lee, they have always denied all the accusations. But the Samsung conviction suggests their trials, too, are unlikely to go well for the defendants.
While Lee and the president are the biggest scalps that prosecutors could possibly hunt down, they have also questioned executives at many of Korea's biggest companies, including Hyundai Motor (HYMTF) , LG Display (LPL) and Lotte Holdings, which has a host of subsidiaries listed in Seoul. They may now turn their attentions to other parts of Korea Inc. Virtually all Korea's top companies were on Choi's list to hit up.
Moon's background, as a human-rights lawyer, suggests he is a crusader. He may well seek to deliver on his promises to break up the cliquey, back-room club that runs Korean big business.
He could hardly be much different from impeached Park, the daughter of a former Korean president herself. Park literally grew up in the Blue House, the presidential mansion, as part of the political elite. Moon's parents were refugees who fled what's now North Korea near the start of the Korean War. He served in South Korea's special forces during his military service.
If he does force change on Korean corporate culture, he will be undoing seven decades of precedent. South Korea was shattered at the war's end in 1953. Nearly five million people died during a short ,but particularly bloody conflict, half of them civilians.
The country climbed off its knees thanks to strong collaboration between the military dictatorship and the private sector. The country's recovery and evolution into one of the "Asian Tigers" was so remarkable, that the back-room deals orchestrated to keep the economy ticking went unquestioned.
That's clearly no longer the case. South Korea has evolved into a developed market, in the eyes of FTSE Russell. The index provider moved it from the emerging-market classification in 2009, thanks in part to its "manifest economic strength."
MSCI, famously, has yet to make that shift. But I'd argue that it fits in the developed camp. It's the 11th-largest economy in the world, just behind Canada and Brazil, according to World Bank stats. It ranks ahead of Russia, Spain and Australia.
Although Brazil and Russia are most certainly emerging markets, South Korea is a "pocket rocket" that punches well above its weight. With 51 million souls, it's also just a little larger than Spain in population terms. And, despite what's been going on with Europe's painfully slow emergence from the Global Financial Crisis, Spain is solidly in the developed world.
I'm not saying corruption is a necessary evil in developing economies. But it's no great surprise, in smaller nations where industry is often at least partly state-controlled, that it takes place. There are fewer checks and balances, too, when power resides in the hands of a privileged few.
Such tinpot tendencies have no place in a 21st century tech-centric economy like Korea. Let's hope Moon does bring sensible reforms to bear. It would make the country more competitive, benefit minority shareholders, and prevent the founding families of the chaebol from enriching themselves at everyone else's expense.
Samsung should do fine without Lee at the helm. Its shares used to trade at a discount compared to other parts of the empire. But they have virtually doubled since the start of 2016 and have advanced 28% this year alone, despite the debacle over the rollout of its explosive Galaxy Note 7 last August. Samsung Electronics overtook Intel (INTC) with its second-quarter earnings to become the world's biggest chipmaker by sales.
But it would be a new dawn to see a chaebol pass from its founding family and into the hands purely of professional managers, controlled by and for the interest of investors. Korea is ready for that light to break.