Samsung sets up anti-corruption panel as chief faces
trials
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[January 09, 2020] By
Heekyong Yang
SEOUL (Reuters) - South Korea's Samsung
Group, whose leader faces trials over a bribery scandal involving former
president Park Geun-hye, has appointed external experts to a new
oversight panel to stamp out criminal conduct, the chief of the
committee said on Thursday.
The move came after a judge overseeing Samsung leader Jay Y. Lee's
bribery case in October criticized the top conglomerate for its lack of
an effective compliance system, saying one was needed to prevent
wrongdoing by executives and its leader.
"The timing Samsung chose to make these changes is not that great... and
if this committee fails, I will end up hugely disgraced," said Kim
Ji-hyung, a former supreme court judge named to head the compliance and
oversight committee, told a news conference.
"Our committee will thoroughly monitor legal risks at Samsung’s top
management," he said.
He said he initially turned down Samsung's offer, because of worries it
would end up failing to make improvements and only be used by Samsung to
secure favourable court rulings.
He said Lee, Samsung's de facto leader, pledged to guarantee the panel's
autonomy at a meeting, adding that it would monitor potential misconduct
at group companies, including flagship Samsung Electronics <005930.KS>.
Although Samsung Group already has a compliance program in place, the
new panel, which will begin work in February, will be run by seven
people, mostly outside experts from legal circles and civic groups.
The compliance panel will comprise seven members, including two from
legal circles, two from academia, two from civic groups and one from
Samsung Electronics - a former Samsung communications chief.
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Samsung Electronics Vice Chairman, Jay Y. Lee, arrives at Seoul high
court in Seoul, South Korea, October 25, 2019. REUTERS/Kim Hong-Ji
Governance experts aired scepticism, calling the move a gesture to get lenient
treatment in court and citing a repeat of criminal offences at Samsung and other
family-run conglomerates, despite pledges to improve governance and
transparency.
"An effective compliance program could be operated within the environment,
encouraging employees to internally report violation without fearing reprisal.
But this is not the case at Korean companies," said Lee Chang-min, a specialist
in corporate governance at Seoul-based Hanyang University.
A South Korean civic group released a statement that the committee is merely an
outside advisory group with no legal responsibility, adding that reforms at
Samsung's board should be made first.
The 51-year-old Lee faces charges that he bribed a friend of former president
Park to win government favour over succession planning at the conglomerate.
In August, the Supreme Court overturned an appeals court ruling that had given
Lee a suspended jail term, raising the possibility of a tougher sentence and
potential return to jail.
Executives at Samsung Electronics and biotech affiliate Samsung BioLogics
<207940.KS> have also been jailed on charges of sabotaging union activities and
accusations about a suspected accounting fraud, respectively.
(Reporting by Heekyong Yang; Editing by Hyunjoo Jin and Clarence Fernandez)
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