Conviction against Samsung's illicit transfer is a warning.
The Seoul Central District Court convicted former chief executive of Samsung Everland Co. and incumbent company president. They were suspected of causing a loss of 96.9 billion won and were accused in Dec. 2003 for selling convertible bonds to Lee Jay-yong, the heir of Samsung Group chairman Lee Kwon-hee. As Everland rated CB lower than normal prices, they were indicted on a charge of breach of trust causing huge losses to the company. The court decided that the purpose of issuing CB was to transfer ruling power of the holding company of the Samsung Group, Everland.
The conviction warns business groups about illicit transfer of wealth through the CB deal. As a result, the prosecution will call in the chairman and his son and investigate the problem of transferring ruling power of Samsung Group again. Samsung Group is one of the best companies in the world, but can't rid itself of moral criticism and the stigma of illegal succession. Now it is difficult for some chairmen to hand down management rights to their children.
Samsung Group contributed much to economic development and increasing exports in South Korea. Nobody would object to Chairman Lee honestly bequeathing management rights to his competent son. It is hard to believe that Jay-yong bought 64% of the Everland shares with less than 10 billion won. Samsung Group insists that it is not a problem, but some South Korean people believe that "Everybody knows they are hiding the illicit transfer of wealth."
The conviction of the illicit transfer serves as a spur to stop chairmen from illegally handing down management rights or wealth to their children in South Korea.
It is expected how Samsung Group will respond. They might appeal to a higher court, but it will make the image of Samsung Group the worse to some South Korean people. Samsung Group should strive to dedicate itself to South Korea's economic development in order to recover its good image. The prosecution's probe should be done for the good of a broader viewpoint.
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 / 입력시간: 2005. 10.06. 09:02
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