Lee Kun-hee, a tycoon convicted of corruption last August but
pardoned by President Lee Myung-bak four months later to help South Korea
campaign for the 2018 Winter Olympics, returned to the helm of Samsung
Electronics on Wednesday.
He was the latest and most prominent in a series of ex-convicts
who have retained top management of major conglomerates in the country.
The Samsung Group is the largest of those, and in announcing Mr.
Lee’s surprise comeback, it said the chairman will bring to its electronics
subsidiary and to the conglomerate as a whole badly needed leadership at a time
when global businesses like Toyota were tottering.
Not all South Koreans were convinced.
“This only proves how unreasonable Samsung can be,” said Kim
Sang-jo, an economist at Hansung University and executive director of
Solidarity for Economic Reform, a civic group. “His return only makes Samsung
more vulnerable to the kind of risk Toyota faces. It shows how distorted and
how closed its decision-making is. It shows Samsung’s lack of a mechanism to
deal with errors.”
Mr. Lee’s return
The manner of Mr. Lee’s return – as disclosed by a senior vice
president and top Samsung spokesman, Rhee In-yong – spoke volumes not only
about the power the taciturn chairman wielded at Samsung but also about that of
other “owner chairmen” like him at their own family-controlled conglomerates,
known in the country as chaebol.
Top executives of Samsung affiliates, all aides loyal to the Lee
family, conferred twice in February as Toyota was dealing with its car recall
crisis, the spokesman told reporters. The executives were worried and decided
to appeal to Mr. Lee to come back with his “seasoned management skills and
leadership.” Then, on February 24, the most senior of them, Lee Su-bin,
chairman of the top life insurer Samsung Life, visited Mr. Lee.
“I will think about it,” Mr. Lee told the envoy, according to
the spokesman. After a month of deliberation, Mr. Lee finally agreed to retake
the chairmanship of Samsung Electronics, the mother ship of the Samsung fleet.
‘It’s crisis time’
In addition, the way Mr. Lee justified his return typified the
reasoning that other convicted tycoons have used to ignore public outcry and
regain management positions. It is also the reason that many courts of law have
offered to an increasingly skeptical public to explain lenient sentences given
top executives convicted of crimes. They have all said, “It’s a crisis time.”
“Now is the real crisis,” Mr. Lee said Wednesday in a rare comment released by
Samsung. “Top global companies are collapsing. You never know what might happen
to Samsung and when. The lines of business and products Samsung now represents
will be gone within the next 10 years. We have to start over again. There is no
time to lose. Let’s focus and march ahead.” Civic groups that have campaigned
for more transparency and accountability from the nation’s top business
families were not impressed.
“We are back to business as usual. With Lee Kun-hee back, we
fear that Samsung is back to its premodern and imperial management style,” said
Kim Keon-ho, an official at the Citizens’ Coalition for Economic Justice. Under
the “imperial” management system symbolised by the Lee family, “vassal”
executives work only for the best interests of the owner families, not for the
shareholders as a whole, Mr. Kim said.
Corruption scandal
Mr. Lee, 68 – whose father founded Samsung in 1938 – headed the
company for more than two decades until he stepped down in April 2008 amid
scandal.
The group’s former chief legal counsel, Kim Yong-chul, had
asserted that Samsung kept a stash of secret funds and ran a network of
bribery. Mr. Lee also faced allegations that he had helped his son, Lee
Jae-yong, buy shares of major subsidiaries at unfairly low prices as part of a
plan to hand over control of Samsung to the younger Mr. Lee.
After an investigation that critics called a whitewash,
prosecutors said they had found no evidence of bribery. But they indicted Mr.
Lee on charges of evading taxes on 4.5 trillion won, or $4 billion, by hiding
the money in stock accounts under the names of aides. In a Supreme Court ruling
last year, he received a suspended three-year prison sentence for tax evasion
and breach of trust.
He also was ordered to pay 45.6 billion won in back taxes and
110 billion won in fines.
In December, President Lee granted him a pardon so that he could
retain his membership on the International Olympic Committee and lead a
campaign by the South Korean city of PyeongChang to host the 2018 Winter
Olympics.
About the same time, Mr. Lee’s son was promoted to become chief
operating officer of Samsung Electronics, South Korea’s biggest company and a
top global maker of computer chips, cell phones and TV sets.
Mr. Lee and his son remain the largest individual shareholders.
New York Times
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