Home > Industry > Samsung Forms Anti-Corruption Panel But Experts Aren’t Convinced

Samsung Forms Anti-Corruption Panel But Experts Aren’t Convinced

In Seoul, South Korea, Samsung is establishing an external expert panel in a bid to stamp out corruption.

It comes as their leader, Jay Y. Lee, faces a trial over a bribery scandal involving former president, Park Geun-hye.

The expert panel has been established after a judge overseeing the Samsung bribery case criticised the top conglomerate for having a lack of effective compliance systems – saying one was needed to prevent further corruption by executives.

People watch a TV screen showing the live broadcasting of Samsung Electronics Co. Vice Chairman Lee Jae-yong’s testifying during a hearing. (AP Photo/Ahn Young-joon)

‘The timing Samsung chose to make these changes is not that great… and if this committee fails, I will end up hugely disgraced,’ Kim Ji-hyung, a former supreme court judge named to head the compliance and oversight committee, told a news conference.

‘Our committee will thoroughly monitor legal risks at Samsung’s top management,’ he said.

But Ji-hyung admitted he initially rejected Samsung’s offer to head the compliance committee because he was concerned it would fail. He also revealed he felt the panel may instead be used by Samsung to secure favourable court rulings.

Ji-hyung also said Lee, Samsung’s de facto leader, made a pledge guaranteeing the panel’s autonomy during a meeting.

Lee Jae-yong, vice chairman of Samsung Electronics, arrives to be questioned as a suspect in a corruption scandal. (Jung Yeon-Je/Pool Photo via AP)

Lee also added that the panel would monitor potential misconduct at group companies – including flagship Samsung Electronics.

Samsung already has an established compliance program in place – but the new panel, which is set to begin work in February – will be run by just seven people, mostly outside experts from legal and civic groups.

The seven members will include two members from legal circles, two from academia, two from civic groups and one from within Samsung – a former communications chief.

But the move has received criticism from governance experts – saying the panel a move to inspire lenience in court. They also cited a repeat of criminal offences at Samsung, despite their pledges for transparency and improved governance.

Former South Korean President Park Geun-hye (L) and her now-jailed confidante Choi Soon-sil (R) sit in a courtroom in the Seoul Central District Court in Seoul. (EPA/POOL SOUTH KOREA OUT)

‘An effective compliance program could be operated within the environment, encouraging employees to internally report violation without fearing reprisal. But this is not the case at Korean companies,’ Lee Chang-min said, a specialist in corporate governance at Seoul-based Hanyang University.

Lee, 51-years-old, faces charges that he bribed a friend of former president Park to win government favour over succession planning at the conglomerate.

In August last year, the South Korean Supreme Court overturned an appeals court ruling that gave Lee a suspended jail term. The move has increased the possibility of a harsher sentence and potential return to jail for Lee.


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