Samsung dismantles nerve centre as chief faces bribery charge

Samsung dismantles nerve centre as chief faces bribery charge
South Korean prosecutors said on Tuesday they will charge Samsung Group chief Jay Y. Lee with bribery and embezzlement as the top conglomerate announced the dismantling of its corporate strategy office, the latest developments in a scandal that has rocked the country for months. Jay Y. Lee, 48, was arrested on Feb. 17 over his alleged role in the corruption scandal involving impeached President Park Geun-hye, dealing a fresh blow to the standard-bearer for Asia’s fourth-largest economy. The special prosecutor’s office said on Tuesday, the last day of its investigation, that it would charge Lee, third-generation leader of the tech giant “chaebol”, and four other executives with bribery and embezzlement. It also said it would charge him with pledging bribes to a company and organizations tied to Park’s confidant, Choi Soon-sil, the woman at the centre of the scandal, to cement his control of the smartphones-to-biopharmaceuticals business empire. “We apologize for the social controversy and distress we have caused,” Samsung Group Executive Vice President Lee June told reporters. The announcement came ahead of a Constitutional Court ruling on whether to uphold parliament’s December impeachment of Park. That impeachment was triggered by accusations that she colluded with Choi to pressure big businesses, including Samsung, to donate to two foundations set up to back the president’s policy initiatives. The 65-year-old daughter of a former military strongman has had her powers suspended. The Constitutional Court’s ruling is expected some time in March. Should it uphold the impeachment, Park would become the country’s first democratically elected president to be thrown out of office. While a sitting president cannot be indicted, the special prosecutors nevertheless have classified her as a suspect. They did not disclose specifics of the charges against Lee or other Samsung executives. Samsung Group, which has denied paying bribes to Park or seeking improper favours from her, declined to comment on the indictment. Park, Choi and Lee have all denied wrongdoing. Based on the main charges levied against Lee, he could face up to 20 years in prison if convicted. NERVE CENTRE SHUT Lee in December promised to shut Samsung’s corporate strategy office, a key nerve centre responsible for major initiatives such as investment in new businesses, amid accusations by politicians that it was a key organ for illicit lobbying efforts. Composed of around 200 employees hand-picked from various affiliates, the office did not exist as a legal entity but wielded enormous power as the instrument of control for the founding Lee family. Samsung said the chief executives and boards of the various affiliates such as Samsung Electronics and Samsung C&T Corp <028260.KS> would set their own course going forward. “It is a shock that Samsung completely dismantled the whole office, cutting the link between group affiliates as if it broke up a fleet,” Chung Sun-sup, chief executive of corporate research firm, said. “This is a significant change to South Korea’s chaebol management style.” A Samsung Group spokeswoman said it had not yet decided how the conglomerate would deal with group-level issues such as co-ordination among affiliates. People familiar with the matter told Reuters in November that Lee was already moving towards more board-centric management to improve governance. The executive became a board member of Samsung Electronics last year, which the sources said signalled a desire to bring the conglomerate’s management practices up to global standards. On Tuesday, the special prosecutor’s office said it would also indict four others at Samsung on charges including bribery and hiding assets overseas: group Vice Chairman Choi Gee-sung, President Chang Choong-ki, Samsung Electronics President Park Sang-jin and Executive Vice President Hwang Sung-soo. Samsung Group said in its subsequent announcement that Choi, Chang and Park had resigned. Samsung chief Lee is accused of pledging 43 billion won ($38-million) in bribes to a company and organizations backed by President Park’s confidant, Choi, to curry favour and cement his control of the conglomerate. The funding included sponsorship of the equestrian career of Choi’s daughter. Samsung Group also said on Tuesday that it would leave the Korean Equestrian Federation that it heads. Special prosecution spokesman Lee Kyu-chul told reporters the case against Park would be handed over to regular prosecutors, while signalling other conglomerates may also become involved in the investigation. It was not immediately clear when Lee’s trial would begin. The special prosecutor’s office will make an official announcement on the conclusion of its investigation on March 6.

4 thoughts on “Samsung dismantles nerve centre as chief faces bribery charge

  1. Thank you so much for giving everyone an exceptionally nice chance to read articles and blog posts from this web site. It is often very fantastic plus packed with a good time for me and my office acquaintances to search your site at the least three times weekly to read the latest stuff you have. And of course, we are at all times motivated with your powerful methods you serve. Certain two points in this post are surely the simplest we have all ever had.

  2. Needed to write you this little observation to finally say thanks over again just for the pleasant information you’ve contributed on this website. It was really shockingly open-handed of you in giving unreservedly what numerous people would have offered for an e book in making some money on their own, especially given that you might well have tried it in case you decided. The points likewise acted to provide a good way to be aware that many people have the identical dreams really like my personal own to realize many more around this problem. I think there are numerous more pleasant periods up front for folks who find out your website.

  3. Thanks so much for providing individuals with an exceptionally wonderful possiblity to check tips from this web site. It is always very lovely plus stuffed with amusement for me personally and my office co-workers to visit your website at the very least 3 times in a week to find out the newest secrets you have got. And lastly, I am just certainly fascinated with your awesome information served by you. Some 4 facts on this page are in reality the most beneficial we have had.

  4. I enjoy you because of all your valuable labor on this blog. My daughter really likes engaging in investigation and it’s really easy to see why. Most people know all concerning the lively means you create vital thoughts on the web site and in addition strongly encourage response from the others on that theme and my princess is in fact studying so much. Take advantage of the remaining portion of the year. You’re performing a first class job.

Leave a Reply

Your email address will not be published. Required fields are marked *