May 6, 2020 / 7:04 AM / 22 days ago

Samsung heir Lee apologises over succession, won't hand control to children

SEOUL (Reuters) - Samsung Group heir Jay Y. Lee, embroiled in a bribery scandal, on Wednesday made a rare apology over controversial succession plans and said he will not hand over management rights to his children at the family-controlled conglomerate.

Samsung Electronics Vice Chairman, Jay Y. Lee, speaks during a news conference at a company's office building in Seoul, South Korea, May 6, 2020. REUTERS/Kim Hong-Ji/Pool

His first public statement in five years came after the Supreme Court in August overturned an appeals court ruling on the bribery case, raising the possibility of a tougher sentence and potential return to jail for the chief of South Korea’s biggest conglomerate.

“We failed, at times, to meet society’s expectations. We even disappointed people and caused concern because we did not strictly uphold the law and ethical standards,” the 51-year-old Lee told a press conference at the company’s Seoul office.

He also apologised for the behaviour of executives caught sabotaging labour union activities, and vowed to guarantee labour rights at the tech giant.

Some of Samsung Group’s former and current executives have been investigated or convicted in other cases. For example, then-board chairman of Samsung Electronics Co Ltd (005930.KS), Lee Sang-hoon, was jailed in December for sabotaging union activities. He has since resigned and lodged an appeal.

Lee’s remarks come after Samsung Group’s oversight panel in March advised him to apologise over the handling of succession, labour and others issues, and pledge to prevent any repeat of governance violations.

In January, Samsung set up the compliance committee after a judge overseeing Lee’s bribery case criticised the conglomerate for its lack of an effective compliance system to prevent executive wrongdoing.

However, the committee, headed by a former supreme court judge, has faced scepticism from governance experts who called it a gesture aimed more towards securing leniency in court.

“Both apology and promise are vague. He did not specifically address what he has done wrong,” said Kim Woo-chan, a professor of finance at Korea University Business School.

Jay Y. Lee, vice chairman of Samsung Electronics, the group’s crown jewel, was charged with bribing a friend of former President Park to win government favour over a deal widely seen as key to succession planning at the conglomerate.

Lee served one year in detention but was released in 2018 after the appellate court halved a lower court’s five-year jail sentence and suspended it for three years. That ruling was overturned in August.

The executive, wearing a dark suit, said many of the controversies surrounding him and Samsung stemmed from succession issues. “I give my word here today that from now on, there will be no more controversy regarding succession,” Lee said.

“I do not plan to pass down my role to my children. This is something I have thought about for a long time but have been hesitant to express it openly.”

MERS OUTBREAK

The media-shy Lee, the only son of Samsung’s frail 78-year-old chairman, Lee Kun-hee, has been the group since Lee senior was hospitalised for a heart attack in 2014.

The last time Lee had a press conference was in 2015 when he offered a public apology over Samsung Group’s handling of the spread of Middle East Respiratory Syndrome (MERS) at a Seoul hospital run by a group foundation.

Slideshow (3 Images)

In 2017, President Moon Jae-in succeeded ousted predecessor Park Geun-hye vowing to reform family-run conglomerates that dominate the economy, saying he would not treat tycoon convictions lightly with presidential pardons, as he said had been done in the past.

Samsung Group has 59 affiliates with interests including technology, insurance, shipbuilding, hotels, theme parks and fashion. Its flagship company, Samsung Electronics, is the world’s biggest smartphone maker and memory chip vendor.

Samsung Electronics last week flagged a profit fall for the current quarter due to a coronavirus-related slump in demand for smartphones and TVs, though said its chip business would remain solid.

Reporting by Hyunjoo Jin and Heekyong Yang; Editing by Christopher Cushing & Shri Navaratnam

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below