Reporter's note Written apology won't help recover market trust
Samsung Securities CEO Koo Sung-hoon, front row second from left, writes a letter of apology along with the company's 200 workers for the brokerage's "fat finger" scandal, at a Korea Banking Institute building in Seoul, Saturday. / Courtesy of Samsung Securities
By Jhoo Dong-chan
Writing a letter of apology is a traditional disciplinary method often used in kindergarten or elementary school-level education. Even middle or high school students do not write letters of apology for their misbehavior these days.
Samsung Securities CEO Koo Sung-hoon, however, seems to believe such a childish approach is the best solution in salvaging the troubled brokerage's tarnished image following the infamous “fat finger” scandal.
The brokerage held an in-house event for self-examination where about 200 workers wrote a letter of apology for the scandal last week, seemingly blaming the moral laxity of certain workers who sold their shares immediately after mistakenly receiving them from the company as dividends.
The event demonstrates the firm has yet to understand the very heart of the matter because it was rather the lack of the company's safety system that should be blamed for failing to double-check its transactions.
Financial authorities indirectly demanded Koo's resignation shortly after the incident, but his sole response was the written apology, more befitting an elementary school student writing under a teacher's scoldings.
“The in-house event is just showing off,” said an industry insider who asked not to be named.
“The idea is just too immature. It won't reshape the company's tarnished image anytime soon. I believe financial authorities' inspection will be a decisive factor for the future of Samsung Securities, and it's not helpful to blame its workers. If the firm persists with this stance, it will take even more time to win back the market trust.”
Samsung Securities mistakenly gave 2.8 billion shares in dividends instead of 2.8 billion won ($2.62 million) to its employees who own company stock earlier this month. Of them, the brokerage admitted 16 workers sold about 5 million shares, escalating the unprecedented mishap.
Samsung Securities shares opened at 35,550 won ($33.04) on Tuesday. The firm's shares were once traded nearly at 40,000 won before the incident, but have yet to hit the bottom.
Koo may believe his absence could make the situation even worse so he needs to take a firm stance dealing with the incident, which is why he is forcing the 200 brokerage workers to write a letter of apology.
An old saying goes, “A good captain goes down with the ship.” Instead of staying with the sinking ship as captain, Koo is now punishing his crew without taking any responsibility.
Such a stance will drive Samsung Securities into a deeper corner in its mission to regain the market's trust.
Samsung Electronics had enjoyed a series of record-high performances without Vice Chairman Lee Jae-yong who was in prison for nearly a year after being convicted on bribery charges.
Samsung Securities may as well do just the same without a CEO. It's time for Koo to take responsibility as the firm's head, instead of hiding behind his employees' written apologies.