Samsung Vice Chairman of the Audit Committee: "Regardless of the 5-year prison sentence request for Lee Jae-yong, the judiciary will make a wise judgment"

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Lee Chan-hee, Chairman of Samsung's Compliance Committee, stated on the 21st regarding the trial of Samsung Electronics Chairman Lee Jae-yong for unfair merger and accounting fraud, "Regardless of the prosecution's demand (5 years imprisonment), the judiciary will make a wise judgment," adding, "I believe the court will fully consider the top management's conviction and support for compliance management."

Chairman Lee made these remarks to reporters before the regular meeting of the Compliance Committee held at 2 p.m. at the Samsung Life Seocho Building in Seocho-gu, Seoul. He said, "It does not seem appropriate to express any opinion as the Compliance Committee Chairman before the court's ruling," but added, "I believe the judiciary will make a judgment regardless of the prosecution's demand." He continued, "The judiciary is the last bastion to maintain our community," and "I believe the judiciary will make a wise decision."

Chairman Lee and others were indicted in September 2020 on charges of violating the Capital Markets Act and breach of duty during the Samsung C&T-Cheil Industries merger. On the 17th, the prosecution demanded 5 years imprisonment and a fine of 500 million won for Chairman Lee at the first trial's sentencing hearing for unfair merger and accounting fraud. For former Samsung Group Future Strategy Office Chief Choi Ji-sung and former Strategy Team Leader Kim Jong-jung, who were also tried, the prosecution requested 4 years and 6 months imprisonment and a fine of 500 million won each. Former Deputy Chief Jang Chung-gi was demanded 3 years imprisonment and a fine of 100 million won. The sentencing is scheduled for January 26 next year. After the demand, Chairman Lee stated in his final statement, "I never had personal gain in mind regarding the merger, and I swear I never even imagined harming other shareholders to increase my shares."

Lee Chan-hee, Chairman of Samsung Compliance Committee, is answering questions from the press before attending the temporary meeting of the Compliance Committee held on August 18 at the Samsung Life Seocho Building in Seocho-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

Chairman Lee evaluated that the Compliance Committee, which entered its fourth year since its launch at the end of January 2020, is operating successfully. The increasing cases of establishing internal control bodies similar to the Compliance Committee, such as Kakao's Compliance and Trust Committee and the Korea Economic Association's (formerly the Federation of Korean Industries) Ethics Committee, are evidence that Samsung's Compliance Committee is operating successfully, and he believes the court will fully consider this during the trial process.

He said, "(Samsung's) Compliance Committee has been successfully established and is operating well enough that various organizations and economic groups are creating similar bodies," adding, "This is possible due to the top management's firm conviction in compliance management and active support." He further added, "I believe the court will fully consider these aspects."

Chairman Lee said that the senior outside director system introduced last month by Samsung affiliates Samsung SDI and Samsung SDS will play a role in restructuring Samsung's governance. He stated, "After much review of various models to determine which is suitable, we decided to apply the senior outside director system, but the results can only be known after implementation," adding, "At present, we decided based on the judgment that the possibility of success is sufficient, and during the decision-making process, the Compliance Committee and related companies communicated sufficiently to form a consensus before announcing it." The companies subject to compliance monitoring and internal control by the Compliance Committee are Samsung Electronics, Samsung C&T, Samsung SDI, Samsung Electro-Mechanics, Samsung SDS, Samsung Life Insurance, and Samsung Fire & Marine Insurance, totaling seven companies.

He did not comment on whether Samsung should establish a control tower like the former Future Strategy Office. Chairman Lee had previously expressed his personal opinion in August, stating, "I think a control tower is necessary for Samsung." He said, "A small sailboat does not need a control tower, but Samsung is an enormous aircraft carrier," adding, "Unless many organizations are completely separated, the absence of a control tower causes problems in terms of efficiency and unity."

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