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Samsung Vice Chairman Lee Jae-yong/Courtesy of Samsung Electronics

Litigation plagues top conglomerate

Samsung Group is Korea’s largest conglomerate by any measure; but de facto leader Vice Chairman Lee Jae-yong must be worrying over the group’s future due to seemingly endless lawsuits.

First of all, the case involving Lee himself and his relationship with former President Park Geun-hye is not finished yet, as it is currently pending at the Supreme Court.

In early 2017, Lee was indicted for allegedly offering bribes to Park and her confidante Choi Soon-sil in return for their help in strengthening his control over the sprawling Samsung business empire.

A Seoul district court sentenced Lee, the only son of bed-ridden Samsung Chairman Lee Kun-hee, to five years in prison midway through 2017, but he was set free in early 2018 after an appeals court halved his sentence and suspended it.

It remains to be seen how the Supreme Court will rule on the case, but Lee runs the risk of again being on the wrong side of the bars.

Even if the top court does not overturn anything, Lee’s headache will not end because litigation continues, especially with regard to the group’s biotech arm, Samsung BioLogics.

Last month, prosecutors raided the Incheon-based company, which has faced accounting scrutiny for almost a year – because of its biosimilars joint venture with Biogen together with its two auditing firms and the Seoul bourse operator’s office.

Earlier in February, the country’s financial regulator filed a complaint that Samsung BioLogics did not comply with accounting rules ahead of its 2016 listing.

Prosecutors are expected to keep looking into the case, which is expected to end up in the courts.

In the case of Samsung Electronics’ after-sales unit, it has been investigated on charges it sabotaged its labor union, and a lawsuit is now pending at a Seoul district court.

How to deal with No. 1 business empire

In my private opinion, however, the country is required to streamline or refine regulations and laws first instead of just targeting all the suspicious cases regarding our companies.”

Some praise the government’s all-out assault on Samsung, but some counter that such moves could hamper the group’s business, thus weighing on the Korean economy.

Many people are critical of our courts, which have been lenient to wealthy businessmen. That should change,” Prof. Sung Tae-yoon of Yonsei University said.

In my private opinion, however, the country is required to streamline or refine regulations and laws first instead of just targeting all the suspicious cases regarding our companies.”

 

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