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Indicted Samsung Group Chairman resigns

The chairman of Samsung has resigned because of tax evasion charges. But the government may choose not to give him prison becasue he has contributed to "the growth of South Korea's economy."

Lee Kun-hee is resigning his position as chairman of Samsung Group, the South Korean company that produces everything from memory chips to ships. He steps down amidst charges of evading about $120 million in taxes.

Although reports say he is "resigning in disgrace," it doesn't look like much will change in who runs the company.

An article in The Washington Post quotes a recent study of white-collar prosecutions in South Korea, which found that:

"...South Korean judges in 82 percent of cases released convicted executives without requiring that they serve time in prison... if it can be determined that a corporate defendant has contributed to the growth of South Korea's economy."

Not only is prison time unlikely, but it appears that the helm of the company will continue as the Lee's family business. Kun-hee's son, Lee Jae-yong, is being sent away for an unspecified time to do his "corporate penance." But experts maintain that, owing to his family's web of stock cross-ownership throughout the conglomerate, the son will likely be the one to guide the company upon his return.

I can hardly get my head around this. Anyone familiar with the South Korean government care to comment?

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

3 comments
song0439
song0439

Still there is a long way to go. I am Korean, and I strongly believe that there are judges who are not corrupted and they are or will be making a change to the way it has long been in the business society.

me
me

Kind of means the whole country is corrupt as far as any activity that is pushing South Korea up the money marlet ladder is concerned. If you are a big fish, this just confirms to any other conglomerate that you can bend the rules as long as you are doing it with your countries interests at heart.. would make business a lot easier here in the UK if that were the case :D

toni.bowers_b
toni.bowers_b

The chairman of Samsung has resigned because of tax evasion charges. But the government may choose not to give him prison because he has contributed to "the growth of South Korea's economy." Huh?