The Korea Herald


Execs at Samsung financial units embroiled in scandals

FSS, police investigating claims of sexual abuse, tax evasion cases

By Kim Yon-se

Published : Jan. 6, 2014 - 20:09

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A number of financial units of Samsung Group were found to have engaged in a chain of irregularities involving sexual harassment and dubious deals with VIP customers, according to financial regulatory officials on Monday.

Among them, a senior executive of one of the financial units was found to have sexually harassed a female employee, an official of the Financial Supervisory Service said.

“The company’s management dismissed the executive at the end of December last year during Samsung’s annual reshuffle,” he said.

The executive was reportedly drunk at the time of the harassment, and Samsung was immediately notified of the incident.

This marked the first time that the Samsung unit has fired an executive implicated in the harassment of a female worker.

The incident came to light after regulators revealed irregular business practices of an insurance unit of Samsung Group.

The FSS ― in coordination with the police ― recently launched a full-fledged investigation into Samsung Life Insurance after police revealed that two insurance salespeople at the company helped a client to evade taxes.

Two Samsung Life insurance salespeople allegedly aided in the evasion of 40 billion won in taxes in connection with a local businessman from 2005 to 2012.

FSS officials said that the employers abetted the income tax dodging through irregular management of insurance policyholders’ money.

“Some could have evaded taxes or exploited tax loopholes after receiving incentives from their company,” said an official.

He said the scrutiny will focus on the internal ethics management of Samsung Life and whether the company turned a blind eye to irregularities by its employees.

Meanwhile, some angry consumers complained that Samsung Life salespeople misled policyholders about dividend payments during their product sales promotion activities.

“Apart from insurance premiums, the contracts for the dividend-oriented products stipulate that insurance firms should pay 90 percent of gains from the stock market and other operating profits to policyholders,” said an official of the Korea Finance Consumer Federation.

The company has maintained the stance over the past few years that it has no obligation to pay the dividends under revised regulatory rules.

Some market insiders criticized that the FSS has taken a lukewarm attitude toward the dispute between insurers and policyholders.

By Kim Yon-se