Samsung chairman may resign amidst bribery allegations
After being questioned for the second time in a week on alleged bribery of prosecutors and judges in South Korea, Samsung group chairman Lee Kun-hee has admitted that he would consider resigning himself along with other moves to revamp the group.
By Ann Steffora Mutschler, Senior Editor -- EDN, April 11, 2008
Samsung group chairman Lee Kun-hee is expected to step down after a second round of questioning by an independent counsel investigating allegations of bribery at the Seoul, South Korea-based consumer electronics giant, according to reports.
Lee, whose wife Hong Ra-Hee has also faced questioning, appeared at the office of the special prosecutor for the second time in a week. Last Friday, he reportedly spent nearly 11 hours with special prosecutors.
The independent counsel, which was sanctioned by South Korea's National Assembly and former president, began its probe in January and has until April 23 to collect evidence.
A former top lawyer for Samsung claimed in November 2007 that the conglomerate had $205 million (200 billion Korean won) in a slush fund and used it to bribe prosecutors and judges. The same lawyer alleged that Lee’s wife, who heads a Samsung art museum, used some of the money to buy expensive paintings from abroad.
Samsung denied the allegations when they were raised.
Lee has led the group, which was established by his late father 70 years ago, for 20 years.
Investigators are also said to be looking into allegations of dealings involving the family-run group's complex ownership structure, known as a “chaebol,” which has been accused of buying influence and conducting questionable transactions between subsidiaries to help controlling families evade taxes and transfer wealth to heirs.
Investigators have also questioned Lee's son, his brother-in-law, and senior Samsung Group officials.
This corruption scandal could lead to a major change in leadership, and possibly his own resignation, Lee said in reports.
“I will deeply think about reshuffling the corporate management structure and the management lineup, including myself,” Lee said. Lee also said in reports that he assumed blame for the scandal and would "take full responsibility, either morally or legally."
Indeed, Samsung said after that comment that Lee's statements were provisional and depended on whether the investigation uncovers any wrongdoing.
“His comment does not mean that the chairman himself or top management will step down. Rather it means that if the special prosecution concludes that there are problems, we will make necessary improvements,” the group told reporters.
The investigation may seem familiar to Lee, who, along with other corporate leaders had been questioned in 1995 over suspicions that they bribed politicians. Lee was later convicted of contributing to a slush fund for then-president Roh Tae-Woo and received a suspended jail sentence. He was pardoned in 1997.
Samsung wields enormous influence in South Korea with groupwide assets valued at $280.8 billion and exports of $66.3 billion last year, making up more than 20% of the country’s total.
