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Samsung forms special panel to address anti-corruption concerns

2020-02-14 17:51 Friday


Samsung is establishing an external panel of experts tasked at reducing internal corruption following a bribery scandal involving its vice chairman, Jay Y. Lee, and former South Korean president, Park Geun-hye.

The expert panel was established after a judge overseeing the associated bribery case criticized the technology giant for having an ineffective anti-corruption compliance system in place. The official said such a panel was needed to stem further corruption by executives in the future.

Lee, 51, faces charges he gave money to a friend of the former president to win government favor.

Kim Ji-hyung, a former supreme court judge appointed to head the oversight and compliance committee, told press: "The timing Samsung chose to make these changes isn't great… and if this committee fails, I'll end up hugely disgraced." 

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"Our committee will thoroughly monitor the legal risks at Samsung's top management," he added.

Ji-hyung admitted that he rejected Samsung's offer to head the committee at first since he was concerned it would not succeed. He also said he worried the panel could instead be used by Samsung to leverage favorable court rulings.

Lee, who is the main Samsung boss, was described by Ji-hyung as having made a guarantee during a meeting that the panel would remain autonomous. Lee also remarked that the panel would look at potential misconduct at group companies as well, such as flagship Samsung Electronics.

A Samsung compliance program was already established prior to the move, but the latest panel will be operated by just 7 people, mostly outside experts from civic and legal groups in the Asia Pacific nation.

The 7 members will include a former communications chief from within Samsung, 2 members from legal circles, 2 from academia and 2 from civic groups.

Some compliance experts have criticized the panel as a move to inspire more leniency in court. They also mentioned a reoccurrence of criminal offenses at Samsung, despite previous pledges for improved governance and transparency.

Lee Chang-min, a specialist in corporate governance at Hanyang University in Seoul, said: "An effective compliance program could be operated within the environment, encouraging employees to internally report violations without fearing reprisal. But this isn't the case at Korean companies."

In August 2019, the South Korean Supreme Court overturned a previous court ruling that gave vice chairman Lee a suspended jail sentence.

The former communications chief Lee In-yong is the only Samsung employee on the 7-member anti-corruption panel. He was promoted to president of the company's corporate relations division in an annual reshuffle of top executives announced last week.

Commentators said that Lee's promotion meant Samsung was determined to show it is strengthening its anti-corruption efforts. He was formerly the head of the communication teams of Samsung Group and its core subsidiary Samsung Electronics.


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