Conflicting Evaluations on Samsung Compliance Monitoring Committee Activities: "Insufficient" vs. "Progressive" (Comprehensive)

Samsung Electronics Vice Chairman Lee Jae-yong is heading to the Seoul Central District Court Complex in Seocho-gu, Seoul, on the 7th to attend the retrial hearing on bribery charges related to the state affairs manipulation case. Photo by Victor Lee

[Asia Economy Reporters Seongpil Cho, 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, were divided.

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

Accountant Hong, recommended by the special prosecution, evaluated the Compliance Committee's activities as 'insufficient,' while lawyer Kim, recommended by Lee's side, described them as 'positive.' Former Justice Kang, appointed by the court, stated that "the establishment of the Compliance Committee has strengthened the compliance monitoring organization," but also expressed a somewhat reserved view, saying it was "not a proactive preventive activity against illegal acts."

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

Accountant Hong pointed out on the day that "there were scheduling limitations in this Compliance Committee inspection." He explained, "To meet the schedule set by the court, the Compliance Committee's 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 stated, "In this case, which has gone beyond suspicion to prosecution by the prosecution, it is natural to establish measures to prevent recurrence, but realistically, it was difficult for the highest management to operate such a compliance monitoring system."

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 also 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 inspected showed results of 'insufficient' or worse, with 13 items being "considerably insufficient." He added, "No measures to prevent recurrence were established," concluding, "The common-sense conclusion is that the compliance monitoring system did not operate effectively."

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

On the other hand, lawyer Kim evaluated positively, stating, "The launch of the Compliance Committee is undoubtedly a fundamental structural change and a significant advancement," and "It strengthens or maintains the compliance will through a compliance monitoring system specialized for the highest management."

Regarding criticism that only some affiliates participate in the Compliance Committee, Kim explained that it is operated realistically according to the current size of the Compliance Committee organization, showing sincerity. Kim said, "If all affiliates were included or if a secretariat of 200 people was created to inspect everything, it would be almost a show," adding, "Currently, seven affiliates with scale are included, and the secretariat has 22 people, which is not large. Beyond this scope, six compliance committee members cannot handle it."

However, Kim emphasized, "The compliance will of the parties themselves is important to prevent corruption of the highest management, such as political power relations and governance," and "the heads themselves need deep self-reflection."

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

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

Heated Exchange Between Special Prosecutors and Defense Over Scheduling of Trial Dates... "Prosecutors Granting Whims Like a Child" vs. "Defense Arguments Have Gone Beyond the Fundamentals"

The special prosecution and defense engaged in a loud dispute over the court's statement about adding trial dates.

After the expert advisors finished their statements at the trial, the special prosecution argued that both sides needed an opportunity to make in-depth statements regarding the expert advisors' evaluations.

The special prosecution stated, "The expert advisors spent only eight hours inspecting compliance monitoring, and it took longer to prepare the report," adding, "We requested in a previous trial that if inspection results come out, additional evaluations would be considered, and the court also agreed to reconsider after the inspection results are released," thus requesting additional trial dates.

The court accepted the special prosecution's opinion and decided not to proceed with the originally scheduled sentencing on the 21st but to allocate time for statements on the expert advisors' evaluations.

During the scheduling process, Lee's defense attorney strongly protested, saying, "It is difficult to understand." The defense said, "Special Prosecutor Yang Jae-sik protested, and the date was set as if indulging a child's whim." Prosecutor Yang responded by raising his voice, saying, "The defense's arguments have gone beyond the fundamentals," and "Is that a reasonable expression?" leading to a tense exchange.

The court mediated, stating, "The date is not changed just because someone requests it," and "This is the result of listening to the expert advisors' opinions and internal discussions," drawing a clear line. Accordingly, the sentencing scheduled for the 21st was postponed to the 30th.

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