Samsung reportedly moving to protect Lee Jae-yong after union busting ruling

Samsung Electronics Vice Chairman Lee Jae-yong bows to the South Korean public ahead of the first hearing of his bribery trial at the Seoul High Court on Oct. 25. (Park Jong-shik, staff photographer)

Focuses on identifying methods of “law-abiding management” as demanded by the court

Samsung Electronics Vice Chairman Lee Jae-yong bows to the South Korean public ahead of the first hearing of his bribery trial at the Seoul High Court on Oct. 25. (Park Jong-shik, staff photographer)

Samsung Electronics and other core elements in the Samsung Group are reportedly making elaborate preparations to protect Vice Chairman Lee Jae-yong amid investigations and trials in connection with a government influence-peddling scandal and accounting improprieties at Samsung BioLogics, even as Samsung Electronics joined Samsung C&T in issuing a statement on Dec. 18 apologizing for past efforts to sabotage union activities at one of its affiliates.

In particular, they are focusing their full capacities on identifying methods of “law-abiding management” as demanded by the court in its remand and reversal decision on the influence-peddling case. For that reason, the likelihood of Lee commenting directly on either the union-busting case or other recent incidents appears low.

At the moment, the biggest focus of Samsung Electronics’ efforts is on preparing for Lee’s trial following the remand and reversal decision. This comes after the first criminal division of Seoul High Court under Judge Jeong Joon-young made an unusual request at the third hearing in the case early this month.

“Will [Samsung] be providing briberies again if it gets the same kind of request from someone with political power?” the court asked at the time, calling on Lee to “present a response before the next hearing on what needs to be done for the company not to agree to such demands when they encounter them.”

In response, Samsung Electronics has reportedly been working with key managers and outside law firms to develop a plan for “law-abiding management.” If the original judgment is upheld in Lee’s remand and reversal case, he would be unable to work at Samsung Electronics or similar affiliates due to provisions restricting employment in the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.

Preparations are also under way for an appellate trial in connection with union obstruction activities at Samsung Electronics Service (Samsung SVC), which led to Chairman of the Board Lee Sang-hoon and other key executives being taken into court custody. Hints of its plans can be found in the position statement issued by Samsung Electronics and Samsung C&T that day. While the statement was short at only four sentences, it did not include anything about humbly accepting the court’s judgment or a message of apology to the Samsung SVC union. In particular, it stated that the companies were “very sorry for the concerns and disappointment that we have caused” with its labor-management issues, while vaguely stating its apology as being directed to “many people.” In other words, it was avoiding any wording that might prove damaging in the appellate trial.

“The statement text was decided through a review by the auditing committee. That’s why it came out a day later [after sentencing in the first trial],” explained a Samsung staffer in a telephone interview with the Hankyoreh.

Many are watching to see whether Lee Jae-yong comments directly on the recent developments. With Lee acting as the group’s owner since assuming the position of “same person” (group head) according to the Fair Trade Act in May 2018, some analysts have been suggesting that he may decide to communicate his personal take on key Samsung Electronics executives being taken into custody. But that is unlikely -- not only because of an ongoing trial and investigation that involve or are believed to involve him directly, but also in light of the Samsung Group’s practice of owners not directly expressing statements of apology. Apologies to the public at the time of the “ANSP X-file incident” in 2006 and a slush fund episode in 2008 were read on behalf of Chairman Lee Kun-hee by second-in-command Lee Hak-soo, director of the Strategy and Planning Office (a previous incarnation of the Future Strategy Office) at the time.

By Kim Kyung-rak, staff reporter

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