Jay Y. Lee, the billionaire sprout of the Samsung Group, personally apologized for the role of his company in a follow-up scandal that rocked South Korea and promised not to pass the leadership on to his children, an unusual public sign of remorse for most of the country powerful conglomerate.
At a corporate headquarters briefing, Lee admitted past mistakes and promised to avoid violating the law in the future. His promise suggests that the leadership of Korea's largest conglomerate, founded by his grandfather, is not automatically passed on to a fourth generation.
"We are known for our world-class technology and products, but Samsung's public opinion is still critical," said the 51-year-old in a dark suit, white shirt, and tie. "It's all because of our shortcomings. It was my fault and I sincerely apologize."
Lee has been involved in allegations for years that he used horses and financial contributions to use an intermediary to win the favor of President Park Geun-hye at the time to help him succeed Samsung. The scandal resulted in Park & # 39; s impeachment in 2017 and her sentencing to 25 years in prison. It also sparked public anger at the power of the country's conglomerates and sparked the election of a reformer to succeed her. The executive's apology could help improve Samsung's image, which has improved after the electronics giant released a series of efforts to help Korea fight Covid-19.
The lawsuit has interrupted Lee's tenure at the helm of Samsung Electronics Co., the world's leading manufacturer of smartphones and memory chips. After his father had a heart attack in 2014, he became the de facto leader. However, he was detained for about a year until his release in early 2018. Lee returned to trial again last year after the alleged misconduct was revised and he is facing the possibility of a prison again.
"I am giving my word here today that from now on there will be no more controversy regarding the succession. There will be absolutely no violation of the law," said Lee. "There will be no reference to legal expediency or measures that cause ethical charges. My only focus will be on increasing Samsung's corporate value."
Lee's tone was very different from the past. He and Samsung had repeatedly insisted that they hadn't done anything wrong.
"It is symbolic that Korea's top companies will separate ownership from management," said Park Ju-gun, president of corporate watchdog CEOScore.
Lee also apologized for Samsung's stance on unions, a longstanding area of controversy.
"Samsung's work culture has not moved in time," he said. "From now on, I will make sure that Samsung is not criticized for" union-free management "."
Samsung C & T Corp., the de facto holding company of the Samsung empire, grew by 6.6%, well ahead of the Korean market index.
"Samsung C&T stocks rose due to the expectation that Lee may not return to prison, reducing uncertainty about testing issues," said Lee Sang-hun, senior analyst at HI Investment & Securities. "Through today's press, Lee has demonstrated leadership and tried to strengthen the company's image."
The appeals court that decided to release Lee is expected to rule on his final sentence in the coming months. Unless there is new evidence during the re-trial, the Court of Appeals is expected to rule, in accordance with the Korean Supreme Court decision, on what Lee used the horses and money to bribe President Park while seeking political support. This would mean changing Lee's currently suspended prison sentence.
The Supreme Court found the total amount of alleged bribery to be at least five years and cannot be suspended in the same way as Lee's existing sentence. However, media coverage in Korea focused on Article 53 of the Korean Penal Code, which provides that, at its discretion, punishment may be reduced "if there are mitigating circumstances." In Lee's case, the damage to Samsung – which is critical to Korea's economy – could be used as a reason to keep him out of jail.
Lee gave up extending his three-year term on the Samsung board. Although he will retain his title as deputy chairman, it will be the board that determines general management decisions, people familiar with the matter said.
Park of CEOScore said that after the years of the scandal, Lee was under pressure to apologize and demonstrate remorse.
"Lee himself has to struggle with succession under Korean law," said Park. "But today's announcement was weak. He didn't say he would take the Lee family's property from Samsung."
(Except for the headline, this story was not edited by NDTV staff and published from a syndicated feed.)