Samsung chairman quits

April 23, 2008 | 08:10

Tags: #bribery #crime #investigation #lee

Companies: #samsung

According to a news report first published by Reuters yesterday, Samsung chief Lee Kun Hee has stepped down from his post following allegations of impropriety.

The Samsung chairman had been the target of an investigation into tax evasion, bribery, and nepotism – largely due to his efforts to ensure his son, Lee Jae Yong, would inherit his position at the head of the electronics firm. Following raids on his offices in January of this year, Kun Hee was indicted on charges of tax evasion and breach of trust last week.

In a brief statement, Kun Hee said he wanted to “deeply apologise for causing concern to the nation and will take full responsibility for that.

Kun Hee has been the head of the Samsung Group for twenty years, and presided over its rise to control more than one-sixth the gross domestic product of South Korea. The company is generally considered to be the largest and most powerful single organisation residing within the country.

Although Kun Hee has stepped down, the Lee family will retain overall ownership of the corporation. Lee Jae Yong, Kun Hee's son and heir apparent who was at the centre of the bribery scandal and due to inherit control of the company, will also leave his executive role and move to an unspecified job elsewhere in the group.

Kun Hee is not alone in his departure from Samsung as a result of the criminal investigations, with four other executives jumping ship, including the head of the Strategic Division – a section of the company which is known for wielding considerable influence over the rest of the Samsung Group, and which will be dismantled following his departure.

Whether anything will actually change at Samsung following Kun Hee's departure is open to debate. Park Won Suk, a senior official of the People's Solidarity for Participatory Democracy group, believes that “the management structure of Samsung is built up so that he can influence it as he wishes anyway”, and with the Lee family retaining overall ownership of the Samsung Group it's hard to see what effect Kun Hee's largely symbolic gesture will have.

Do you believe Samsung can really change so long as the Lee family continue to exert influence, or should the company be left alone so long as no laws are being broken? Share your thoughts over in the forums.
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