ID :
23458
Thu, 10/09/2008 - 13:02
Auther :
Shortlink :
https://oananews.org//node/23458
The shortlink copeid
Samsung braces itself for ruling on ex-chairman
By Kim Hyun
SEOUL, Oct. 9 (Yonhap) -- Samsung Group braced itself on Thursday before an appeals court verdict on its former chairman, Lee Kun-hee, who was convicted of tax evasion but spared a prison term by a lower court.
The Seoul High Court is set to rule on Lee and seven former and incumbent Samsung
executives on Friday, following an independent probe that prompted the tycoon's
resignation and a drastic overhaul in Korea's largest conglomerate.
"Samsung has kept up key business operations like marketing, investment or
employment. Still, because the trial involves the whole group, it has caused some
emotional constraint on our personnel," a Samsung Group senior official said,
requesting anonymity.
Lee was sentenced to three years in jail with a five-year suspension and fined
110 billion won (US$77 million) in July on charges of tax evasion for hidden
assets. But the lower court dismissed the more serious charge of breach of trust
in relation to Lee's controversial transfer of group control to his son and heir
apparent, Jae-yong.
The special prosecutor who indicted Lee with a mandate from the National Assembly
is demanding a seven year jail sentence and a 350-billion-won fine, which he also
sought in the lower court.
In his final court statement in early September, Lee appealed for leniency and
apologized to the people for "failing to meet their expectation and trust."
In the independent probe, special prosecutor Cho Joon-woong charged Lee with
evading 112.8 billion won in taxes by hiding assets under borrowed-name stock
accounts between 2000-2006 and orchestrating the murky wealth transfer to his son
in the mid-1990s.
In the father-to-son transfer, Jae-yong acquired convertible bonds from Samsung's
de-facto holding company, Everland theme park, and shares of other Samsung
affiliates at "remarkably low" prices, the prosecutor said. The bargain takeover
helped him acquire group control without paying taxes and causing tremendous
losses to shareholders, he said.
The lower court, however, said that Everland shareholders' losses do not
constitute breach of trust by Lee. The judge later said in an interview that the
prosecutor had wrongfully interpreted the wealth transfer, which constitutes tax
evasion, as breach of trust.
Civic activists denounced the lower court ruling as "shameful," saying it
reversed Korea's decade-long efforts to reform family-controlled conglomerates.
They argued the verdict cleared the way for other tycoons to bequeath their
wealth to their children without paying taxes.
To shed its tarnished image, Samsung has dismantled its strategic planning
office, a key decision-making body, and relegated the former chairman's authority
to executives as part of efforts to increase transparency in the company, which
generates a fifth of the country's exports.
hkim@yna.co.kr
(END)
SEOUL, Oct. 9 (Yonhap) -- Samsung Group braced itself on Thursday before an appeals court verdict on its former chairman, Lee Kun-hee, who was convicted of tax evasion but spared a prison term by a lower court.
The Seoul High Court is set to rule on Lee and seven former and incumbent Samsung
executives on Friday, following an independent probe that prompted the tycoon's
resignation and a drastic overhaul in Korea's largest conglomerate.
"Samsung has kept up key business operations like marketing, investment or
employment. Still, because the trial involves the whole group, it has caused some
emotional constraint on our personnel," a Samsung Group senior official said,
requesting anonymity.
Lee was sentenced to three years in jail with a five-year suspension and fined
110 billion won (US$77 million) in July on charges of tax evasion for hidden
assets. But the lower court dismissed the more serious charge of breach of trust
in relation to Lee's controversial transfer of group control to his son and heir
apparent, Jae-yong.
The special prosecutor who indicted Lee with a mandate from the National Assembly
is demanding a seven year jail sentence and a 350-billion-won fine, which he also
sought in the lower court.
In his final court statement in early September, Lee appealed for leniency and
apologized to the people for "failing to meet their expectation and trust."
In the independent probe, special prosecutor Cho Joon-woong charged Lee with
evading 112.8 billion won in taxes by hiding assets under borrowed-name stock
accounts between 2000-2006 and orchestrating the murky wealth transfer to his son
in the mid-1990s.
In the father-to-son transfer, Jae-yong acquired convertible bonds from Samsung's
de-facto holding company, Everland theme park, and shares of other Samsung
affiliates at "remarkably low" prices, the prosecutor said. The bargain takeover
helped him acquire group control without paying taxes and causing tremendous
losses to shareholders, he said.
The lower court, however, said that Everland shareholders' losses do not
constitute breach of trust by Lee. The judge later said in an interview that the
prosecutor had wrongfully interpreted the wealth transfer, which constitutes tax
evasion, as breach of trust.
Civic activists denounced the lower court ruling as "shameful," saying it
reversed Korea's decade-long efforts to reform family-controlled conglomerates.
They argued the verdict cleared the way for other tycoons to bequeath their
wealth to their children without paying taxes.
To shed its tarnished image, Samsung has dismantled its strategic planning
office, a key decision-making body, and relegated the former chairman's authority
to executives as part of efforts to increase transparency in the company, which
generates a fifth of the country's exports.
hkim@yna.co.kr
(END)
