April 26, 2024
Samsung
Samsung Group left unsettled
[THE INVESTOR] Nearly all of Samsung Group was placed on full alert on Jan.12, as de facto leader Lee Jae-yong walked into the office of the special counsel on the presidential scandal in the morning as a suspect facing possible charges of bribery.
Since the second half of last year, the nation’s largest conglomerate had kept its profile low, delaying major executive-level reshuffles and withholding celebrations despite Samsung Electronics' estimated 50 percent jump in earnings for the last quarter of 2016.
The scandal that exploded from a discarded tablet PC purportedly owned by embattled President Park Geun-hye’s personal friend Choi Soon-sil allegedly containing contents that prove her meddling in state affairs has now blossomed into two prongs of pressure by the legislature and the judiciary against the chaebol, the administration and the president.
Depending on the special counsel’s investigation, the outcome is expected to deal a blow to the heir apparent’s smooth succession of power, which had begun momentum from the controversial merger of Samsung’s two affiliates.
Samsung Group was found to have wired financial support to Choi and Choi’s daughter Chung Yoo-ra in Germany, and investigators suspect that came in return for the state-run National Pension Service backing up the landmark merger of Samsung C&T and Cheil Industries in 2015.
It is the second time for Lee to be summoned for questioning as a suspect in nine years.
In Feb. 2008, when Lee was the senior vice president of Samsung Electronics, he underwent questioning as a suspect over attempting to illicitly succeed management of the group and creating slush funds to bribe government officials, lawmakers and prosecutors.
Then-Chairman Lee Kun-hee had transferred ownership to his only son by issuing convertible bonds of Everland, an amusement park run by Samsung, at far lower than market price.
Lee Kun-hee was sentenced to seven years imprisonment with a fine of 350 billion won ($295.7 million), while Lee Jae-yong was ruled innocent. In April 2008, Lee Kun-hee resigned from his post as chairman, taking full responsibility.
Meanwhile, heir apparent Lee’s summons as a bribery suspect is sending chills through the group.
“As for now we have to wait see how things progress. But frustration lingers over the fate of (Lee) and top management,” said a group official.
The special counsel is also said to be looking to file an arrest warrant for Choi Gee-sung, head of the future strategy office, and Chang Choong-ki, president of the future strategy office.
“Lee, in particular, can affect the overall management, investment deals and other important decisions,” the official added.
Samsung Group declined to officially comment on the questioning.
In efforts to keep the operation steady, Samsung Group plans to carry out performance assessments of junior employees as scheduled in March.
Samsung Electronics on the Korean stock market began with a drop morning on Jan.12, following news of Lee‘s appearance before the counsel, but had risen 0.37 percent from close to 1.92 million won per share as of 2:30 p.m on Jan.11.
By Kim Bo-gyung/The Korea Herald (lisakim425@heralcorp.com)
Since the second half of last year, the nation’s largest conglomerate had kept its profile low, delaying major executive-level reshuffles and withholding celebrations despite Samsung Electronics' estimated 50 percent jump in earnings for the last quarter of 2016.
The scandal that exploded from a discarded tablet PC purportedly owned by embattled President Park Geun-hye’s personal friend Choi Soon-sil allegedly containing contents that prove her meddling in state affairs has now blossomed into two prongs of pressure by the legislature and the judiciary against the chaebol, the administration and the president.
Depending on the special counsel’s investigation, the outcome is expected to deal a blow to the heir apparent’s smooth succession of power, which had begun momentum from the controversial merger of Samsung’s two affiliates.
Samsung Group was found to have wired financial support to Choi and Choi’s daughter Chung Yoo-ra in Germany, and investigators suspect that came in return for the state-run National Pension Service backing up the landmark merger of Samsung C&T and Cheil Industries in 2015.
It is the second time for Lee to be summoned for questioning as a suspect in nine years.
In Feb. 2008, when Lee was the senior vice president of Samsung Electronics, he underwent questioning as a suspect over attempting to illicitly succeed management of the group and creating slush funds to bribe government officials, lawmakers and prosecutors.
Then-Chairman Lee Kun-hee had transferred ownership to his only son by issuing convertible bonds of Everland, an amusement park run by Samsung, at far lower than market price.
Lee Kun-hee was sentenced to seven years imprisonment with a fine of 350 billion won ($295.7 million), while Lee Jae-yong was ruled innocent. In April 2008, Lee Kun-hee resigned from his post as chairman, taking full responsibility.
Meanwhile, heir apparent Lee’s summons as a bribery suspect is sending chills through the group.
“As for now we have to wait see how things progress. But frustration lingers over the fate of (Lee) and top management,” said a group official.
The special counsel is also said to be looking to file an arrest warrant for Choi Gee-sung, head of the future strategy office, and Chang Choong-ki, president of the future strategy office.
“Lee, in particular, can affect the overall management, investment deals and other important decisions,” the official added.
Samsung Group declined to officially comment on the questioning.
In efforts to keep the operation steady, Samsung Group plans to carry out performance assessments of junior employees as scheduled in March.
Samsung Electronics on the Korean stock market began with a drop morning on Jan.12, following news of Lee‘s appearance before the counsel, but had risen 0.37 percent from close to 1.92 million won per share as of 2:30 p.m on Jan.11.
By Kim Bo-gyung/The Korea Herald (lisakim425@heralcorp.com)
