Samsung denies 'foul play' about reports on compliance watchdog

By Baek Byung-yeul

Samsung has denied a media report that the conglomerate pulled strings behind the scenes regarding a court advisory panel's review of the group's compliance committee, saying that information it supplied was not manipulated.

In a statement released Monday, the conglomerate said Media Today, a local review of journalistic reporting, stated that Samsung allegedly delivered different sources than those in a report submitted to the court. Some civic organizations also criticized the company's alleged move.

Last week, the Seoul High Court made public the report from three experts, who assessed the activities of Samsung's compliance committee. The experts were former Constitutional Court Judge Kang Il-won, attorney Kim Kyung-soo and accountant Hong Soon-tak.

In the 83-page report, the experts dealt with 18 detailed items in three categories ― the committee's effectiveness, the effectiveness of compliance monitoring in Samsung Group subsidiaries and the durability of the monitoring.

The report showed that the former Constitutional Court judge expressed a constructive view of the committee's activities, recognizing the durability and effectiveness of the watchdog. He gave a positive view on 10 items, negative on six and neutral on two.

After the report was publicized, media outlets reported that the compliance committee had earned a positive review from the panel, but Media Today downplayed the reports, claiming that Samsung sent “reference materials” to reporters in order to create favorable sentiment toward the conglomerate.

However, the group said Media Today's report “was inconsistent with the facts and went against common sense.”

“The Hankyeoreh newspaper and the Kyunghyang Shinmun first reported on the advisory panel's assessment of the compliance committee, Dec. 16. After the two newspapers' reports were published, reporters from other media contacted us to confirm the validity of the facts and we gave explanations to them,” Samsung said, adding that “we are expressing our concerns about the idea that a corporation was manipulating public opinion.”

Given Samsung rarely releases statements refuting media reports, its move this time shows how important the compliance committee's activities are perceived by the court and the public.

Group head and Samsung Electronics Vice Chairman Lee Jae-yong is undergoing a high court re-hearing of a bribery conviction involving jailed former President Park Geun-hye, and so it remains to be seen whether the group's efforts to be as transparent as possible will affect any ruling.

The compliance committee was launched in February as the nation's most powerful conglomerate realized the need for a watchdog to help it recover its tarnished reputation after a series of scandals including the corruption conviction of the vice chairman.

Also, establishing the committee was a response to an order from a Seoul High Court justice who told Lee to improve internal compliance systems and address the prolonged problems stemming from the company's family-run business structure during an appeals hearing in October, 2019.

In response, the group created the committee led by former Supreme Court Justice Kim Ji-hyung and comprised of six other members including Ko Gye-hyun, secretary-general of Citizens United for Consumer Sovereignty; Kwon Tae-sun, co-chief of the Civil Society Organizations Network; and attorney Bong Wook.

The compliance committee has looked at three issues this year ― the group's attitude to unions, management succession and communication with civic organizations ― as key points on its agenda to improve the conglomerate's business compliance.

With regard to the court advisory panel's report, compliance committee head Kim said he “will take the opinions of experts as a verification of the committee's activities.”