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Samsung BioLogics head office in Incheon/Courtesy of Samsung BioLogics

Prosecutors keep raiding Samsung units

Employees tend to envy CEOs who can hire and fire them. Along the same line, CEOs in Korea envy tycoons who rule family-controlled conglomerates despite small direct shareholding.

Instead of shareholders, tycoons appoint and sack CEOs of affiliates. They are reigning over the sprawling conglomerates, otherwise called chaebol here.

In the sense, Samsung Group Vice Chairman Lee Jae-yong would be regarded as Korea’s most powerful businessman as he leads the country’s top chaebol.

In fact, however, Lee is suffering from so many setbacks, especially from the prosecution.

First of all, Lee himself was indicted two years ago for allegedly offering bribes to former President Park Geun-hye in return for her help in beefing up Lee’s control over Samsung.

A Seoul district court sentenced Lee to five years in prison in 2017, and he was released only after an appeals court halved his sentence and suspended it early 2018.

The case is currently pending at the Supreme Court, and Lee runs the risk of returning to prison depending on the final verdict that is expected to come next month at earliest.

Plus, the prosecution looks into two affiliates of Samsung – Samsung BioLogics, the group’s biotech arm, and Samsung Electronics’ after-sales unit.

The former is suspected of having not complied with accounting rules ahead of its 2016 listing to the Seoul bourse while the latter faces allegations that the outfit sabotaged its labor union.

Regarding the two charges, Samsung subsidiaries were raided at least eight times this year and 13 times last year.

In particular, prosecutors seem to believe that the accounting issues of Samsung BioLogics were reported to Vice Chairman Lee before the 2016 listing.

That means that the 51-year-old de-facto chief of Samsung may face a new criminal charge.

Given that, many would wonder whether or not Lee is happy with heading Samsung.

 

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