Posted on 04/22/2008 7:25:19 AM PDT by TigerLikesRooster
April 22, 2008
Samsung chairman Lee Kun Hee resigns on national TV
Leo Lewis, Asia Business Correspondent
The chairman of Samsung, the most powerful tycoon in South Korea, has fallen on his sword after an unprecedented investigation of his business affairs.
Lee Kun Hee, the reclusive 66-year old patrician who has led the family-controlled chaebol empire for two decades, appeared live on national television in Seoul this afternoon to announce his resignation.
Samsung is responsible for a fifth of all South Korean exports and runs 59 operations throughout the world, from theme parks and mobile phones to memory chips and oil tankers.
Bowing deeply in apology, but with hardly any visible expression on his face, Mr Lee, idolised by a generation of Korean business leaders as an untouchable hero, said that he was “saddened as there is still much to do and a way to go”.
His decision to step down, which some analysts believe may herald a shake-up of Samsung’s notoriously complex corporate structure, was accompanied by several other key management resignations and the break-up of the so-called strategic management group by which the sprawling conglomerate was ultimately controlled.
The resignation comes less than a week after Mr Lee was indicted for tax evasion and breach of trust.
If convicted of either charge, Mr Lee could face a lengthy prison sentence, although, significantly, the investigators were unable to substantiate the main focus of the investigation – that Samsung maintained a hefty slush fund and used it to bribe bureaucrats, judges and politicians.
The indictment itself followed an extraordinary probe of the Samsung group, which saw both Mr Lee and his wife interrogated over a variety of allegations.
In striking contrast with previous investigations of Korean chaebol, which tend to emerge from minority shareholder groups, the Samsung investigation stemmed from the allegations of a whistle-blower from within the company’s own legal department.
Many analysts pointed out, however, that even without being the chairman of the Samsung group, Mr Lee and his family would maintain plenty of influence over the direction of Samsung.
A former chief corporate lawyer of Samsung group came out with the detailed allegation on this subject. He knew pretty much the entire mechanism. On the other hand, his action is a kind of things which could have him definitely disbarred if he were practicing law in U.S. His action was essentially the boldfaced breach of attorney-client previlege.
Samsung has been running a division of corporate spooks who handle these kinds of corporate black-ops, such as father-to-son succession issue. They were also served as lobbyists who cultivate friendly ties with officials in all branches of government, and politicians. These spooks were managing numerous bank accounts to fund such operations. There were under assumed or borrowed names of executives at Samsung's many corporations, sometimes without their knowledge. They had huge slush funds at their disposal. Details of this operation also came out during the investigation.
Some of these operations were necessary evil of sorts as an insurance against political whim of those in power. These operations used to be defensive in nature, but recently they had become proactive and preemptive these days. On top of that, slush funds started to widen its scope, for example, being used for buying up expensive artworks for Lee's wife, who runs art museums. With Samsung's succession problem being such an overriding issue and so much money at their disposal, corporate spooks have grown too powerful inside Samsung. This could be the result of their overreaching.
Ping!
In the late eighties and early nineties, I did a lot of work for Samsung Electronics and visited Seoul many times. I also went to their factory in Suwon and once made a two hour trip to Taejon with a driver who spoke no English. That was a boring drive, let me tell you!
Korea bump for later...........
KimBob bump. :)
An just who large is the national TV? Did he need a ladder to get on the natonal TV. < /silliness>
DANG!
I had a scathing and truly painful regarding your provincial and secluded ignorance all fired up and ready to go, and then I see your /silliness tag.
CURSE YOU, RED BARON!!
Actually, I’m not provincial. I’m fairly well traveled, speak/read German (I can read Luther in the original), understand Dutch, can chit chat in Italian, and love France anytime except during the summer.
I’ve never once griped about how we do things back home.
I love puppies and want to solve world hunger. My perfect date.....
My sincere apologies for the mistinterpretation of my statement. I was referring to the “
provincials” not US!!
Guten Auben.
But, a chance to get out of crowded, Westernized SEOUL and take a two hour drive to the countryside in Korea, to me at least would be fascinating and I would take in as much from the passenger seat as possible! ;-)
One of the American guys who worked for Samsung was really into Korean culture. He studied there, spoke Korean, and eventually married a Korean girl. He said it was all choreographed. The students knew exactly how much to push the cops and the cops only went so far pushing back. I suspect that trouble starts when when side, usually the students, broke the line, likely agitated by communists agents. This was back in the eighties, after all.
I hope the whole lousy company goes under.
nolas moor, (probably) (read backwards);-)
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