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Samsung heir pledges not to pass on group control to children

Lee Jae-yong (Yonhap)
Lee Jae-yong (Yonhap)


Apologizing for past wrongdoings while inheriting leadership from his father, Samsung Electronics heir and Vice Chairman Lee Jae-yong pledged Wednesday he will not hand over management control to his children.

“I will not pass the company’s managerial rights to my children,” Lee said during a televised press conference, arranged upon the firm’s external compliance committee’s advice. He touched on issues chosen by the committee, including an apology over illegal practices related to leadership succession and the firm’s past pressure against labor unions.

“I have thought about it for a long time, but was hesitant about making it public,” he said of his decision regarding the children, adding that it was because he deemed it was irresponsible of him to discuss about this issue when he has yet to prove his leadership amid a difficult business environment.

Without delving into details, Lee said, “I will make sure there will no longer be any controversy regarding my inheritance” with regard to pending issues surrounding the power transfer from his father and Samsung Chairman Lee Kun-hee.

“And I will not allow any unlawful actions.”

Lee also spent much of his speech underscoring the grave business situation and the challenges faced by South Korea’s largest conglomerate.

“Amid the rapidly changing business environment with intensifying competition, Samsung will need top-class talent regardless of gender, academic background and nationality.

“My responsibility is to bring them and have them lead the company to a position that is more crucial than mine,” he said. “That’s the only way to make Samsung, the first-class IT company.”

It was the first official media appearance of Lee since 2015 when he apologized for mistakes at Samsung Medical Center during the outbreak of the Middle East respiratory syndrome.

His apology comes after the compliance monitoring committee led by former Justice Chief Kim Ji-hyung advised him in March to concede and apologize about the past wrongdoings including the group’s anti-labor union stance.

The committee was formed in February at the order of Justice Jeong Joon-young, who currently leads the retrial of Lee’s bribery and embezzlement case, involving former President Park Geun-hye.

Some critics viewed the apology as Samsung’s tactic to induce the court to confirm the suspension of his five-year sentence in the appeals, which was overturned by the Supreme Court in August.

Judge Jeong had ordered Lee to make visible efforts to enhance Samsung’s compliance system to prevent a repeat of such bribery scandals in the first hearing.

“Even after my retrial ends, the compliance committee will continue its operation as an independent body,” Lee said. “I will make sure that compliance is deeply rooted as a culture of Samsung.”

He also apologized over the disruption of labor activities at former Samsung Everland and Samsung SDS and for those hurt in the process.

He vowed to ban the “no labor union” principle that ran deep at Samsung for the past 50 years.

“Samsung will strictly comply with the labor laws and ensure labor rights, while nurturing a healthy labor union culture,” he said.

Experts viewed Lee’s apology as a meaningful change for Samsung, but pointed out lack of details.

“Samsung has taken a step forward from the past, but I wish it was more specific with detail measures,” said Kim Hoh, head of THE LAB h.

Although it was not the heir’s voluntary apology, the action showed that Samsung does respect the compliance committee, Kim said.

“More importantly, the barometer of a good apology is follow-up actions taken afterward.”

By Song Su-hyun (song@heraldcorp.com)
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