Yet another corporation more powerful than the law

Samsung’s former chief legal counsel “accused [Samsung Electronics chairman and the richest man in South Korea, Lee Kun-hee] and his loyal aides of having stolen as much as 10 trillion won, or $9 billion, from Samsung subsidiaries and stashed it in stock and bank accounts illegally opened in the names of executives”:

The book alleges that they shredded books, fabricated evidence and bribed politicians, bureaucrats, prosecutors, judges and journalists, mainly to ensure that they would not stand in the way of Mr. Lee’s illegal transfer of corporate control to his only son, Lee Jae-yong, 41.

In his book, Mr. Kim depicts Mr. Lee and “vassal” executives at Samsung as bribing thieves who “lord over” the country, its government and media. He portrays prosecutors as opportunists who are ruthless to those they regard as “dead” powers, like a former president, but subservient to and afraid of Samsung, which he calls the “power that never dies.”

The legal counsel’s charges forced an investigation, which uncovered crimes, but Lee Kun-hee escaped with a slap on the wrist:

When Mr. Kim first approached the news media with his allegations, he said, no one wanted to touch the subject. It took a group of outspoken Catholic priests to publicize his claims, forcing an investigation.

Prosecutors uncovered 4.5 trillion won in accounts that violated a law requiring depositors to use their real names; they determined that the money belonged to Mr. Lee, inherited from his father, Lee Byung-chull, who founded Samsung.

But they concluded that there was no evidence of bribery, which astonished Mr. Kim, since he had provided a list of prosecutors whom he said he had helped Samsung bribe while he was working there. In addition, a lawmaker said she had once been offered a golf bag full of cash from Samsung, and a former presidential aide said he had received and returned a cash gift from the company.

Last year, Mr. Lee was convicted of having evaded 46.5 billion won in taxes on profits generated from the hidden money and of having helped his son buy shares of a Samsung subsidiary at an artificially low price. He was sentenced to three years in prison, but a judge suspended the sentence, saying the crime “was not serious enough to merit an actual prison term.”

This new book has sold over 120,000 copies in a small country with virtually no press coverage or marketing… because news organizations are scared to lose Samsung’s advertising dollars.

Posted by James on Sunday, April 25, 2010