Conflicting Evaluations on Compliance Oversight Committee Activities: "Insufficient" vs. "Progressive"

[Asia Economy Reporters Seongpil Jo and Gimin Lee] The evaluations of three expert advisors on the activities of the Samsung Compliance Committee, one of the sentencing factors for Samsung Electronics Vice Chairman Lee Jae-yong, who is undergoing a retrial for the 'state affairs manipulation' case, differed.

The Seoul High Court Criminal Division 1 (Presiding Judge Jung Jun-young) held a continuation hearing on the 7th for Vice Chairman Lee's retrial and reviewed the opinions of three expert advisors on the Compliance Committee's activities. They were accountant Hong, recommended by the special prosecution team; lawyer Kim Kyung-soo, recommended by Lee’s defense team; and former Constitutional Court Justice Kang Il-won, appointed by the court.

Lee Jae-yong, Vice Chairman of Samsung Electronics [Photo by Yonhap News]

Special Prosecutor’s Hong Soon-tak: "Pre-determined Evaluation... Compliance Committee Insufficient"

Accountant Hong pointed out that "there were scheduling limitations in this Compliance Committee review." He stated, "To meet the schedule set by the court, the Compliance Committee activities were evaluated by dividing them into 16 categories," adding, "As a result, on-site inspections were limited to within 10 hours per day." Hong also said, "In this case, which is not just at the suspicion level but has led to prosecution, it is natural that measures to prevent recurrence should be established, but realistically, it was difficult for the compliance monitoring system to operate effectively for the top management."

He argued, "While results are important, procedural legitimacy is also crucial," and "a comprehensive conclusion should have been drawn based on the results of individual inspection items according to the inspection purpose." He further criticized, "Since the inspection items were not agreed upon in advance, conclusions on individual items were drawn, which would have granted procedural legitimacy."

Hong revealed that all 16 items were found to be at least insufficient in the inspection conducted with procedural limitations. Among them, 13 items were described as "considerably insufficient." He said, "No measures to prevent recurrence were established," and concluded, "The overall conclusion is that the compliance monitoring system did not operate effectively, which is common sense."

Kim Kyung-soo 'Positive' · Kang Il-won 'Reserved'... Divergent Evaluations

On the other hand, lawyer Kim evaluated positively, saying, "The launch of the Compliance Committee is undoubtedly a fundamental structural change and a significant advancement," and "It strengthens or maintains compliance intentions through a compliance monitoring system specialized for top management." However, Kim emphasized, "The compliance intention of the parties themselves is important in preventing corruption related to political power or governance structures," and "the heads of the conglomerate need deep self-reflection."

Former Justice Kang gave a reserved conclusion. He explained, "While preparing the final report, there were some differences in expression among the three expert advisors, so each wrote their own report on the inspection results." While acknowledging that "the compliance monitoring organization has been strengthened," he gave a reserved evaluation, stating, "It has not yet reached the stage of organizing potential new risks and conducting proactive preventive activities." Kang forecasted, "The sustainability of the Compliance Committee is currently very positive," but added, "Changes may occur, but it is difficult to judge that at this stage."

Kim Ji-hyung, Chairman of Samsung Compliance Committee / Photo by Kang Jin-hyung aymsdream@

Kim Ji-hyung, Chair of the Compliance Committee: "A Good Opportunity for Third-Party Verification"

The court has expressed its intention to reflect the effectiveness of the Samsung Compliance Committee in Vice Chairman Lee’s sentencing. Accordingly, three expert advisors were appointed to evaluate the effectiveness of the Compliance Committee. However, the expert advisors cannot participate in the court’s deliberations on guilt or sentencing decisions and serve only as assistants to the court.

Kim Ji-hyung, Chair of the Samsung Compliance Committee (lawyer at Law Firm Jipyung), said regarding the expert advisors’ evaluations, "We regard this as a good opportunity to receive third-party verification and will actively refer to it to address shortcomings," adding, "We will continue to faithfully fulfill the duties assigned to the committee."

The court plans to hold the final arguments for Vice Chairman Lee and others on the 21st, concluding the trial on this day. If scheduled as planned, the verdict is expected to be delivered in January next year.

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