Samsung Compliance Committee Recommends Vice Chairman Lee Jae-yong Ensure No Illegal Procedures in Employment Restriction Matters

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The Samsung Compliance Committee stated that although there are unclear points regarding the conditions and scope of Vice Chairman Lee Jae-yong's employment restrictions, it plans to recommend that related laws and regulations be followed during the procedural process to prevent any illegal activities.

The Samsung Compliance Committee held a regular meeting on the 19th at Samsung's Seocho building in Seoul and announced this. At the meeting, the recent controversy surrounding Vice Chairman Lee's employment restrictions was discussed. Last month, the Ministry of Justice notified Vice Chairman Lee, who is currently imprisoned after being sentenced to 2 years and 6 months in prison in the retrial of the National Pension Service scandal, that he is subject to employment restrictions. Article 14 of the Act on the Aggravated Punishment of Specific Economic Crimes stipulates that if a person commits embezzlement or breach of trust involving 500 million won or more, they are restricted from employment in related companies for five years from the date their prison sentence ends or is confirmed not to be executed.

Recently, this law was specified to apply employment restrictions only when the prison sentence has ended, leading to controversy over whether it applies while the sentence is still being served. Vice Chairman Lee's side argues that since the sentence is still being served and he is an unregistered executive who does not receive compensation, he is not subject to employment restrictions. However, civic groups claim that since he was sentenced to imprisonment, he should step down from the vice chairman position even while incarcerated. Regarding this, Samsung Electronics Vice Chairman Kim Ki-nam responded at the shareholders' meeting held on the 17th, saying, "The company will fully consider Vice Chairman Lee's role in the global network and future business decisions and comprehensively review the company's situation and legal regulations."

The Samsung Compliance Committee, continuing discussions from last month's meeting, acknowledged the ambiguity in the conditions and scope of employment restrictions but emphasized ensuring no illegal acts occur. A committee official explained, "We did not recommend dismissal or resignation; rather, it means that when the company and the individual proceed with related procedures in the future, they should comply with relevant laws and regulations."

Additionally, at the meeting, the Samsung Compliance Committee reported that it received factual reports and improvement measures from compliance officers of affiliated companies regarding a complaint filed last month by the Samsung labor union representatives to the Ministry of Labor. The complaint alleged that Samsung Group was suppressing and neutralizing the union through illegal support and operation of labor-management councils. The committee added, "We urged continuous management to ensure that the activities of the labor-management councils do not violate the law."

Before the regular meeting, the Samsung Compliance Committee held a roundtable with the heads of the Business Support Task Force (TF), Financial Competitiveness Enhancement TF, and EPC Competitiveness Strengthening TF, which were announced last month. Attendees included Samsung Electronics President Jeong Hyun-ho, Samsung Electronics Vice President Jeong Hae-rin, Samsung C&T President Kim Myung-soo, and Samsung Life Insurance Vice President Park Jong-moon. The committee emphasized transparency and prevention of conflicts of interest related to TF activities and explained that the participants agreed on the importance of preventing compliance obligation violation risks.

Meanwhile, the Samsung Compliance Committee announced that seven affiliates, including Samsung Electronics, held board meetings this month and appointed Professor Won Suk-yeon of Ewha Womans University’s Department of Public Administration as a new compliance committee member, recommended by Compliance Committee Chairman Kim Ji-hyung. Professor Won has served as chair of the Administrative and Social Affairs Subcommittee of the Presidential Regulatory Reform Committee and as an evaluation and advisory member for the Supreme Prosecutors' Office, Ministry of Strategy and Finance, Ministry of Justice, and Ministry of Personnel Management. She currently serves as an auditor for the Supreme Court.

The next regular meeting of the Samsung Compliance Committee is scheduled for the 20th of next month.

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