Samsung Chairman Risks IOC Membership
By Kang Hyun-kyung
Staff Reporter
Accusations against Samsung Group Chairman Lee Kun-hee are likely to deal a blow to his membership with the International Olympic Committee (IOC) if he is found guilty.
Lee has served as the only Korean member of the IOC since 1996 and played a leading role in promoting the Olympic movement, mainly through Samsung's partnership with the committee.
The IOC has applied a strict ethics code to its members in recent years and therefore Korea's largest business tycoon, Lee, may face grave consequences in his international career, such as disqualification from the post if convicted.
The concern was raised after independent counsel Cho Joon-woong announced his team's final probe results regarding Samsung's allegations.
Public opinion was divided over the finding.
The governing Grand National Party (GNP) and business groups were relieved but the opposition parties and civic groups expressed clear discontent with the announcement.
GNP Spokeswoman Cho Yoon-seon said Samsung management should take legal and social responsibility as the investigation found they were involved in the illegal wealth transfer from Chairman Lee to his son Lee Jae-yong.
``Samsung should make its management more transparent. Other companies should also learn a lesson from this and make efforts to ensure transparent and ethical business management,'' she said.
The main opposition liberal United Democratic Party (UDP) and minor parties, however, said the special prosecutors failed to meet the expectations of the general public in their investigation.
UDP Spokesman Yoo Jong-pil said it will be unavoidable for Chun and his team to face the criticism that they tried to cover up the truth.
``We hope the court will bring to light Samsung's shady business practices,'' he said.
The minor Liberty Forward Party (LFP) also criticized the prosecutors. And the Creative Korea Party (CKP) said the independent counsel's conclusion supported conglomerates' bad practices, while ordinary people were mandated to respect the rule of law.
Most business lobbying groups breathed a sigh of relief at the announcement.
The Federation of Korean Industries (FKI) said it expects Samsung to normalize business as soon as possible.
The Korea Chamber of Commerce and Industry expects the nation's largest conglomerate to root out bad business practices.
Civic groups were the most critical of the finding.
Kim Young-hee, a vice director of the Solidarity for Economic Reform (SER), said the announcement was not convincing at all.
Kim is also a lawyer for whistle-blower Kim Young-chul, who disclosed the allegedly dirty secrets of the global giant, such as bribing politicians and corrupt corporate governance.
``Prosecutors failed to reveal the truth regarding the creation of slush funds,'' she said.
Kim added SER would work with other civic groups to file additional suits against Samsung.
Samsung's complex management structure has long been a source of dispute. The chairman was able to control the group through the cross-shareholding scheme between Samsung affiliates although he holds a relatively small stake, NGOs claim.
The findings frustrated the whistle-blower. The bribery charge was his central argument that Samsung was corrupting the country. Yonhap quoted him as saying ``No need to see the findings. I've had too much, and I want to stop this.''
Meanwhile, New Right, a hardcore conservative group, said that Samsung should learn lessons from the ``ordeal'' and incorporate global business standards.
The group, however, criticize the whistleblower and his supporters, labeling them ``leftists seeking to demonize Korea's largest business group'' and to spread an anti-business atmosphere.
The Samsung boss was ranked 605th in Forbes Magazine's 2008 World's Billionaires list, with an estimated wealth of $2 billion. But if his borrowed-name assets were included, his wealth would more than triple.