By Kim Rahn
An independent counsel has cleared Samsung Group Chairman Lee Kun-hee's son Jae-yong of all allegations involving losses associated with his failed management of tech startups in 2000.
The special investigation team Thursday announced that there was insufficient evidence to indict the chairman's only son and 27 other executives against whom a civic group filed complaints.
The high-profile case is expected to invite strong protest from civic groups. They are pledging an appeal.
In 2000, Jae-yong led 14 Internet venture companies, including e-Samsung as the largest shareholder, but the companies became insolvent after just one year, with e-Samsung suffering 20 billion won in losses. Nine other Samsung affiliates purchased stocks in 2001 to make up for the loss and Samsung's crown prince did not suffer any financial damage.
In 2005, People's Solidarity for Participatory Democracy filed the complaint against the son and heads of the affiliates for what it calls the neglect of duty, claiming they took Jae-yong's failure upon themselves and consequently caused damage to Samsung employees and shareholders.
``We acknowledged that the group's strategic planning office actively participated in the establishment and management of the venture firms, including e-Samsung. The affiliates also purchased the stocks systematically under the group's orchestration,'' an investigator of the probe team said.
``However, it is hard to say that they bought the stocks only to cover Jae-yong's financial losses and to prevent him from losing his reputation,'' he said. ``Even though the affiliates were ordered by the strategic planning office, they underwent normal decision-making processes, such as board of directors' voting, and purchased the stocks at reasonable prices. So we cannot say they breached trust only because they purchased a specific person's shares.''
The civic group said prices were not reasonable and it would make an appeal, saying the probe result was easy on Samsung over the conglomerate's illegalities.
In the meantime, group vice chairman Lee Hak-soo was summoned Thursday, the third time since the special probe team was launched early this year for Samsung's alleged slush fund creation and bribery.
A local daily reported earlier that when the prosecution investigated Samsung several years ago, then senior prosecutor and current Cheong Wa Dae secretary Lee Jong-chan advised the vice chairman to leave the country to avoid the probe. The vice chairman said the claim is ``ridiculous,'' adding he would sue the newspaper.