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NY Times, May 30, 2020
Samsung Heir Apologizes for Corruption and Union-Busting Scandals
By Choe Sang-Hun
SEOUL, South Korea — The de facto head of Samsung, Lee Jae-yong,
apologized on Wednesday for the corruption and union-busting scandals
that have bedeviled his conglomerate, declaring that he will be the last
of his family members to lead the South Korean corporate empire.
During a nationally televised news conference, Mr. Lee, 51, said Samsung
would also respect its workers’ right to organize independent labor
unions, ending its decades-old “no-union” philosophy. That stance was
often cited as one of the key reasons Samsung could grow so rapidly
while other conglomerates, like Hyundai, were often crippled by militant
labor activism at their work sites.
Mr. Lee — known as J.Y. Lee in the West — officially holds the title of
vice chairman of Samsung, but his influence there goes much further. He
has been running the conglomerate founded by his grandfather Lee
Byung-chull since a heart attack incapacitated his father, Lee Kun-hee,
the chairman, in 2014. But he has also stood trial on charges of bribing
Park Geun-hye, the former president of South Korea, who was impeached
and ousted for corruption and abuse of power.
“Samsung has not strictly complied with laws and ethics,” Mr. Lee said
with a bow during the news conference at a Samsung headquarters in
Seoul. “Although it has been lauded for being first rate in technology
and products, Samsung has faced harsh criticism.”
“This is my fault,” he said. “I apologize.”
Over the decades, Samsung and its top leaders have often apologized for
bribery, tax-evasion and other crimes. But corruption scandals have
continued at Samsung, South Korea’s largest and most profitable business
group.
Both analysts and critics have said those scandals stemmed largely from
the Lee family’s attempts to ensure a father-to-son transfer of
managerial power over Samsung at all costs, even if that meant breaking
laws and buying political influence.
On Wednesday, Mr. Lee accepted such criticism.
“All of the problems basically started from this succession issue,” he
said. “From now on, I will make sure that no controversy happens again
regarding the succession issue.”
Mr. Lee said he had no intention of bequeathing managerial powers to his
own children and vowed to give professional managers greater roles in
Samsung.
The Samsung scion still faces his own legal issues, in a courtroom back
and forth that has kept his name and the name of his empire in the
headlines.
In 2017, Mr. Lee was sentenced to five years in prison for providing Ms.
Park and one of her friends with $7 million in bribes to obtain the
government’s support for a merger of two Samsung affiliates that was
seen as crucial to tightening Mr. Lee’s control over the Samsung
conglomerate.
Then, in February 2018, an appeals court judge reduced Mr. Lee’s prison
term to two and a half years and suspended the sentence, releasing him
from prison. The judge ruled that the amount of bribes Mr. Lee had
provided was less than half of the sum determined by the trial court.
That was not the end of the matter. In August, the Supreme Court of
South Korea ruled that the appeals court had underestimated the value of
the bribes, and sent the case back to the lower court for retrial. That
raised the possibility that Mr. Lee could be imprisoned again.
More setbacks followed.
In two separate court rulings in December, 39 people — most of them
current or former Samsung managers — were convicted of conspiring
illegally for years to sabotage efforts to organize independent unions
at two Samsung affiliates and their subcontractors, and of plotting to
keep the conglomerate free of union activism.
Several top Samsung figures — including Lee Sang-hoon, chairman of
Samsung Electronics’ board of directors and widely considered the No. 2
figure in the conglomerate’s hierarchy — were sent to prison.
In October, the appeals court judge reconsidering Mr. Lee’s case ordered
Samsung to present a plan on how to ensure that the conglomerate would
not break laws again. Samsung started its “compliance commission” in
January.
The commission has since made a series of recommendations for Samsung,
including ending its “no-union management” and apologizing for the
corruption scandal.
On Wednesday, Mr. Lee was acting on the committee’s recommendations.
“From now on, I will make sure that Samsung is no longer accused of
pursuing no labor union management,” he said, adding that Samsung will
respect South Korea’s constitutionally guaranteed right for workers to
form independent unions.
Critics have said the appeals court judge’s order and the compliance
committee’s recommendations were nothing but an attempt to create a
pretext to give Mr. Lee a lenient prison term and keep him out of
prison. His father was convicted twice of bribery and other corruption
charges, but never spent a day in prison.
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