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Samsung Group chairman Lee Kun-hee steps down

Samsung Group chairman Lee Kun-hee reacts during a press conference at the Samsung Group headquarters in Seoul, South Korea, yesterday, after announcing he was stepping down. PHOTO: AP

Embattled Samsung Group chairman Lee Kun-hee said yesterday he was stepping down from his post at the top of South Korea’s biggest conglomerate following his indictment on tax evasion charges.

“I today have decided to resign from the post of chairman of Samsung,” Lee told a news conference less than one week after he was indicted following a special independent counsel investigation into the conglomerate’s operations.

Lee took over the reins of Samsung two decades ago following the death of his father, the conglomerate’s founder. He is one of South Korea’s richest people and is widely regarded as its most influential business executive.

Samsung Group has interests in dozens of businesses including electronics, shipbuilding and construction. Its companies account for up to 20 percent of South Korea’s exports, some estimates said.

Samsung Electronics, its flagship corporation, is a world leader in computer chips, flat-screen TVs and mobile phones. Lee is widely seen as the driving force behind its rise into a global technology force.

“We, including myself, have caused troubles to the nation with the special probe,” Lee said. “I deeply apologize for that and I’ll take full responsibility for everything, both legally and morally.”

After Lee spoke, vice chairman Lee Hak-soo, considered the chairman’s closest confidante, also announced his resignation as well as that of Lee Jae-yong, the chairman’s son and heir who is an executive at Samsung Electronics Co.

Lee, the vice chairman, said that Lee Soo-bin, chairman of Samsung Life Insurance, would be representing Samsung Group externally. It was not immediately clear if the post of group chairman would remain vacant or eventually be filled.

“I think there will be a pretty serious impact to the group,” Yim Jun-seok, a Samsung spokesman, told reporters after Lee’s resignation. He didn’t elaborate.

Special prosecutors last Thursday indicted Lee on charges of evading 112.8 billion won (US$113 million) in taxes, ending a three-month probe in the family-run conglomerate prompted by allegations of wrongdoing by a former Samsung lawyer.

Prosecutors, however, dismissed the most explosive claim — that Samsung used affiliates to raise a slush fund to bribe influential South Koreans — for lack of evidence.

Samsung Group is characterized by a complex ownership structure based on a web of cross-shareholdings by group companies — some unlisted. Lee’s father founded the conglomerate 70 years ago.

They also indicted Lee without arrest, saying his apprehension was too big a risk for South Korea, citing “the extremely competitive global economic situation.”

Lee hinted earlier this month that he might resign over the scandal following questioning by the special prosecutors.

Besides Lee, nine other Samsung executives were indicted last week.

Samsung also announced it would eliminate its Strategic Planning Office, long a lightning rod for critics who say the conglomerate’s management structure is too opaque.
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