Jaeyong Lee, Vice Chairman of Samsung Electronics. Reporter Woo Sang-jo
In fact, it was revealed in the ruling that the opinion of former Constitutional Judge Kang Il-won was decisive in the fact that the Samsung Electronics Vice Chairman Lee Jae-yong did not reflect the Samsung Compliance Committee in the sentencing. Judge Kang, a professional judge determined by the court, monitored the progress of the compliance committee’s activities over the past year and reported it.
Quoting Kang Il-won and refuting Kim Gyeong-soo
According to Vice Chairman Lee’s decision on the 18th, the Seoul High Court Criminal Division 1 (Deputy Judge Jung Joon-young Song Young-seung, Kang Sang-wook) judged that the activities of the Samsung Compliance Committee were not effective enough to reflect in the sentence. The Judge pointed out that the Compliance Committee “has not reached the point of defining new types of risks and conducting preemptive risk prevention and monitoring activities.” This is a quote from former judge Kang Il-won among the three professional judges.
◦ Former Constitutional Judge Kang Il-won (court side): In this case, we are focusing on the offenses in question. The definition of new types of risks and preemptive risk prevention and monitoring activities are not reached.
◦ Attorney Kyungsoo Kim (Samsung): There is an effective monitoring of external support funds, etc., which had problems in the past. It is correct to strict management by categorizing the risks that have occurred in the past. It is not effective to significantly increase the organization of the committee or secretariat.
◦ Hong Soon-Tak Accountant (Special Prosecutor’s Office): Risk classification and evaluation index and inspection items to prevent and monitor illegal activities were not performed. It does not work effectively by current standards.
MB·Park Geun-hye talked, “More non-financial measures are needed”
On the other hand, the judge directly refuted the opinion of attorney Kim Kyung-soo, a professional judge on the Samsung side. In this case, attorney Kim emphasized that the sponsorship and internal transactions that were designated as the window for slush fund raising are being monitored. However, the judges assessed that this was a countermeasure focused only on’existing risks’.
Currently, the compliance committee deliberates on spending more than 10 million won in external sponsorships, but the opinion of the judges is that this is insufficient to prevent slush funding. In particular, the case of the dozen embezzlement of former President Lee Myung-bak, which was in charge of the second trial by Deputy Judge Jung Joon-young, the presiding judge, was directly addressed in the judgment. Said.
The judges also mentioned other former presidents such as Chun Doo-hwan, Roh Tae-woo, Lee Myung-bak, and Park Geun-hye, saying, “Samsung needs to analyze how to raise funds and prepare countermeasures.” It added that elements that were not previously problematic, such as borrowed shares, should also be managed first.
“Can you monitor most affiliates?”
Samsung Electronics Vice Chairman Lee, who enters a press conference last year at the Samsung Electronics office building in Seocho-gu, Seoul. yunhap news
Attorney Kim’s opinion that,’If we monitor illegal activities at the level of working-level employees at affiliated companies, we can filter out massive illegal activities at the management level’ was not accepted.
The judiciary saw that the Compliance Committee was too far to handle all of the close to 20 Samsung affiliates. Currently, the Compliance Committee only monitors eight core affiliates, including Samsung Electronics and Samsung C&T, but pointed out that any number of subsidiaries could be mobilized for illegal activities.
At the same time, Samsung SDS, which was involved in the case of low-priced bonds with underwriting rights in the process of taking over Samsung’s management rights, was an unlisted company, Samsung S1 and Cheil Worldwide were mobilized for funding from the K Sports Foundation at the request of former President Park Geun-hye. He mentioned that Biologics was investigated.
“Unable to contain’Samsung’s heart’ such as unwarranted rooms”
The judiciary picked the’Restructuring Headquarters (Restructuring Headquarters)’ and’U.S. Warfare Offices (Future Strategy Office)’ as the core hubs for the violation of Samsung’s law. It was called’the heart of Samsung’ because it was in charge of planning and greetings within the group, but it was an organization that was involved in suspicions such as the creation of borrowed accounts and slush funds. The rescue copy was dismantled in the case of Samsung Special Prosecutors’ Office in 2008, and the US war room was dismantled after the Gukjeong Nongdan incident in 2017. The Justice Department pointed out that “(Compliance Committee) does not provide concrete countermeasures against illegal acts through an organization that acts as a’control tower’ as above.”
Criticism of “the ruling that seems to have feathers in hanbok”
An incumbent judge analyzed that “It has been 30 years since the US introduced the Compliance Committee as a sentencing factor for corporate crime, but it was the first time in Korea that the court had no choice but to apply it conservatively.” However, an attorney from the prosecutor’s office said, “The court seems to be mistaken for the Compliance Committee as a universally versatile.” No,” he criticized.
An official at the special prosecutor said, “The judgment was ambiguous as if a feather was inserted in a hanbok.”
Reporter Dr. Ra [email protected]