Will the 'JY National Apology' Really Happen... Samsung's Legal Risks Are Key

Samsung "Review" Following Compliance Oversight Committee Recommendation
Also Calls for Abandoning No-Union Management

[Asia Economy Reporter Ki-min Lee] The Samsung Compliance Committee has recommended that Samsung Electronics Vice Chairman Lee Jae-yong issue a public apology regarding the succession of management rights and declare the abandonment of the no-labor-union management policy. It is anticipated that Vice Chairman Lee will soon announce his position. However, the level of his response to the requested apology and measures to prevent recurrence depends on the 'judicial risk' faced by Lee and Samsung Electronics, analysts say.

According to the Compliance Committee and Samsung on the 12th, Vice Chairman Lee and seven Samsung affiliates, including Samsung Electronics, accepted the committee's recommendations yesterday and are currently considering their response plans. These affiliates must respond to the recommendations within 30 days.

Earlier, through the recommendations sent to Samsung, the Compliance Committee pointed out that the main issue concerning Samsung was related to the succession of management rights. Therefore, it recommended that Vice Chairman Lee not only reflect and apologize but also publicly declare to the public that no violations of compliance obligations will occur regarding succession. Additionally, the committee urged reflection and apology for repeated violations of labor laws within Samsung affiliates and the failure to properly manage compliance risks in labor relations, while also demanding a declaration of abandoning the 'no-labor-union management' policy.

In the business community, it is widely expected that Samsung will likely accept the Compliance Committee's recommendations, given Samsung's continuous commitment to principled management. Vice Chairman Lee recently stated at the Samsung Electronics Gumi plant, which he visited as a gesture of support during the COVID-19 pandemic, that "Samsung, which has grown with the support of the people, should share and stand together with our society, especially in times like these." Samsung Electronics Vice Chairman Kim Ki-nam also conveyed in a message to shareholders ahead of the general meeting that "We will strengthen the company's compliance monitoring functions centered on the Compliance Committee to practice principled management." As part of its compliance management efforts, Samsung Electronics appointed former Minister of Strategy and Finance Park Jae-wan, an outside director and audit committee member, as the chairman of the board last month.

However, it is known that Samsung is deliberating internally on the extent of Vice Chairman Lee's forthcoming statement. Direct apologies and admissions concerning ongoing trials and investigations could potentially influence future legal proceedings. Vice Chairman Lee is currently undergoing a retrial for charges of bribery involving former President Park Geun-hye and Choi Seo-won (formerly Choi Soon-sil) related to the succession of management rights. Prosecutors are also investigating allegations of accounting fraud at Samsung BioLogics. The special prosecutor regards both cases as related to requests connected to Lee's management succession efforts. On the other hand, Lee's legal team appeals, stating, "He sincerely regrets and reflects on his actions and deeply apologizes to the public. However, please consider that this was a passive offering without quid pro quo under political pressure."

This content was produced with the assistance of AI translation services.