- A number of Samsung company scandals have been generating news headlines at a steady clip in recent weeks, such that Samsung heir Jay Y. Lee actually felt compelled to deliver a public apology about them.
- The Samsung scandals include a bribery and corruption probe.
- Also wrapped up in the negative press is a controversial 2015 merger of affiliates that allowed the Samsung heir to advance as a successor.
Most of the users who rely on Samsung’s popular Galaxy S-series phones and Note phablets probably separate the idea of Samsung, the brand, from the idea of the Samsung company — and are probably quite unaware, in fact, of the growing pile of news headlines from recent weeks covering a complex scandal and corruption probe inside the South Korea-based conglomerate.
When ordinary people are aware of negative headlines out of the company, it tends to involve product misfires rather than boardroom intrigue. That’s to be expected, but one thing that’s striking here is the chasm between Samsung’s massive, globe-spanning success and having so many scandals swirling behind the scenes that Samsung heir Jay Y. Lee actually felt compelled recently to deliver a public apology. And in yet another development along these lines, prosecutors reportedly questioned Lee this week about a controversial 2015 merger between two affiliates that helped him, according to Korean media, secure control of the company.
Lee was already facing accusations of bribery related to his move to succeed Samsung patriarch Lee Kun-hee. The 2015 acquisition came under fire after prosecutors started probing a suspicion of dodgy accounting practices, with Reuters explaining that one of the two companies involved in the merger (Samsung Biologics) may have had its value artificially inflated by the US equivalent of $3.64 billion.
The suspicion was that the company had skirted accounting rules to pad the bottom line of its major owner, the top shareholders of which included Lee.
This all comes as Samsung’s elderly chairman suffered a heart attack and was hospitalized several years ago, prompting his only son’s actions to try and secure control of the company. For now, though, officials close to the matter are keeping tight-lipped. “We today summoned a relevant person with regard to Samsung Group’s illegal merger and accounting fraud case,” is the only thing an official at the Seoul Central District Prosecutors’ office would say about the matter to Reuters.
A Samsung Electronics spokesman, where Lee is vice chairman, declined to comment at all.
For additional background, the 51-year-old executive has already served a 1-year detention over the bribery case that was suspended back in 2018. However, a court there overturned a lower court decision in the case in 2019, which has raised the possibility of the executive facing a tough sentence again.