REUTERS
May 7, 2020 at 16:11 JST
SEOUL--Samsung Group heir Jay Y. Lee’s vow to end dynastic succession at South Korea’s biggest conglomerate following three generations of Lee family control sparked skepticism on Thursday.
Lee, also known as Lee Jae-yong, on Wednesday made the surprise announcement that he would not pass on the company founded by his grandfather in 1938 to his children. He also apologized for a bribery scandal involving former president Park Geun-hye and Samsung Group, as well as for the group’s union-busting activities.
But governance experts say it was less of an apology than a legal defense as Lee, 51, awaits a court ruling on the corruption case which could result in a lengthy prison sentence.
They also said he failed to offer details about his wrongdoing and there was little to bind him to his pledge not to hand over control to his children.
“It is an empty promise. This is about 20 years’ time and there is no binding commitment,” Park Sang-in, a Seoul National University professor and an expert on corporate governance, said.
Despite Samsung’s success at remaining competitive on the global stage as the world’s largest memory chip and smartphone maker, persistent legal troubles surrounding the family have made them deeply unpopular in South Korea.
Some critics say Lee was trying to divert public attention from the ongoing legal controversy by vowing to be the last Lee to control the powerful business empire, which has 62 affiliates and posted revenue of $267 billion (28 trillion yen) last year.
“If he really wants to sever the family control of the group, he has to announce how he will offload stocks in Samsung’s de facto holding company, Samsung C&T, as Bill Gates sold his stake in Microsoft,” Kim Woo-chan, a professor of finance at Korea University Business School, said.
Lee did not specifically address legal troubles including a controversial merger of two Samsung units, a plan which prosecutors found key to its succession planning and the bribery scandal.
Nor did he mention an ongoing probe by prosecutors into an alleged accounting fraud at Samsung’s biotech affiliate, Samsung Biologics.
A Samsung compliance committee headed by a former supreme court judge is due to meet Thursday afternoon to review Lee’s public statement, a spokesman for the panel said.
The panel--set up by the group in January to monitor wrongdoing by executives--had asked Lee to offer a public apology over his handling of succession, labor and other issues.
The Supreme Court in August overturned an appeals court ruling on the bribery case, raising the possibility of a tougher sentence than the suspended jail term he received in 2018 for seeking favors from Park in succession planning.
Despite turmoil at the top, Samsung Electronics Co., Ltd., the crown jewel of Samsung Group, managed to increase earnings in the first quarter thanks to solid chip sales even as the coronavirus outbreak has hit demand for its premium smartphones.
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