Start the conversation
By Mike Caggeso
Surrounded by charges of tax evasion and breach of duty, Chairman Lee Kun Hee will step down from Samsung Group – parent company of 59 businesses and South Korea's largest company.
He'll be joined by Vice Chairman Lee Hak Soo and Presient Kim In Joo, who will quit by the end of June.
"The resignation by Chairman Lee Kun Hee is unprecedented," Tom Coyner, who helps advise foreign investors in Korea as president of Soft Landing Consulting Ltd. in Seoul, told Bloomberg. Coyner said it signals "an end to the era of the Masters of the Universe."
Story continues below…
After more than two decades on top of Samsung, Lee was shrouded in controversy. Last week, he was charged with evading $133 million (112.8 billion won) in taxes and breaching his chairman duties by enabling his son to reign control of several of the group's units.
These charges stem from a four-month investigation that began when Lee's house was raided in January after a former company lawyer alleged the company created several "slush funds" valued at $200 million.
Lee tactfully apologized in a televised briefing – not so much for the base of the charges, but for the trouble they are causing.
"I'm truly sorry for causing so much concern with the investigation," Lee said. "I will assume full legal and moral responsibility."
Interestingly, the current charges pale in comparison to previous charges brought against Lee. In 1996, he was convicted of bribing South Korean presidents Chun Doo Hwan and Roh Tae Woo, which earned him a two-year prison term that was soon pardoned by sitting president Kim Young Sam.
And in 2005, Lee was investigated for – and later cleared of – using corporate funds to pay presidential candidates.
No change expected, somehow
For Samsung, the resignation trifecta creates a serious hole atop the conglomerate. In the meantime, the group will dismantle its strategic planning office.
Some analysts are skeptical of the move's ambiguity, especially when timed after top brass resignations.
It would take a team of lawyers to dissect the degree and specifics of the Lee family's ownership of Samsung, but put simply, they own a large majority of the parent company and its units' shares.
And it isn't likely that the scandal – as colossal as it would be if it occurred in the United States – will affect the company's operations.
Samsung's businesses include high-tech offerings, semiconductors, telecommunication, life insurance, fiber optics, supertankers, compressors and more – all of which account for about one-fifth of South Korea's exports, Reuters reported.
Samsung Electronics Co. Ltd. alone is Asia's largest maker of cell phones and televisions.
News and Related Story Links: