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Samsung Electronics Vice Chairman Lee Jae-yong makes a public apology on May 6. (Baek So-ah, staff photographer)

In a public document, Samsung Electronics stated that it may take “significant measures” against company executives who are being tried on charges of embezzlement and breach of trust “if necessary to prevent damage to corporate value.” One potential question is whether that principle will also apply to Samsung Electronics Vice Chairman Lee Jae-yong, who is currently on trial for bribery and embezzlement in connection with the influence-peddling scandal that toppled former President Park Geun-hye.

The 2019 corporate governance report that Samsung Electronics submitted to South Korea’s Financial Supervisory Service (FSS) on May 29 stated that “in the event of an executive being indicted and tried on criminal charges such as embezzlement, we will take the necessary measures against the executive in question following the outcome of the trial and taking into consideration the specifics of the case and the related laws.”

The report added that “even before the litigation has concluded, we may take significant measures if necessary to prevent damage to corporate value.” The corporate governance report is composed every year, but this was the first report to include this passage.

The report also contains a passage that appears to have been drafted with Lee Jae-yong in mind. “One individual who is currently working as an unregistered executive was charged with embezzlement and convicted on several counts. The case was remanded by the Supreme Court and is currently being retried by a lower court,” the report said. Aside from Lee Jae-yong’s trial at the Seoul High Court in connection with the influence-peddling scandal, there are no other cases involving Samsung Electronics executives that are being retried on orders from the Supreme Court. Furthermore, Lee is the only figure involved in that trial who is working as an unregistered executive at the company.

Some experts are skeptical about whether this principle, which is being expressed for the first time, will be strictly applied to Lee himself.

“If Lee is ultimately convicted, his employment would be legally restricted anyway. Furthermore, the company has only said that it ‘may’ take substantial measures before the case has concluded, which wouldn’t compel it to take action. The passage appears to be an attempt to gain credibility by emphasizing legal compliance with the hope of favorably influencing Lee’s trial,” said Lee Chang-min, a professor at Hanyang University and deputy director of Solidarity for Economic Reform.

“We did not write that with any specific individual in mind. We updated that section with the aim of providing more detail and communicating with greater transparency,” a Samsung Electronics spokesperson said in response to an inquiry.

By Song Chae Kyung-wha, staff reporter

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