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Samsung Heir Apologizes for Corruption and Union-Busting Scandals


SEOUL, South Korea — The de facto head of Samsung, Lee Jae-yong, apologized on Wednesday for the corruption and union-busting scandals that have bedeviled his conglomerate, declaring that he will be the last of his family members to lead the South Korean corporate empire.

Speaking during a nationally televised news conference, Mr. Lee, 51, said Samsung would also respect its workers’ right to organize independent labor unions, ending its decades-old “no-union” philosophy. That stance was often cited as one of the key reasons Samsung could grow so rapidly while other conglomerates, like Hyundai, were often crippled by militant labor activism at their work sites.

Mr. Lee — known as J.Y. Lee in the West — officially holds the title of vice chairman of Samsung, but his influence there goes much further. He has been running the conglomerate founded by his late grandfather, Lee Byung-chull, since his father, Chairman Lee Kun-hee, became incapacitated with a heart attack in 2014. But he has also stood trial on charges of bribing Park Geun-hye, the former president of South Korea who was impeached and ousted for corruption and abuse of power.

“Samsung has not strictly complied with laws and ethics,” Mr. Lee said with a bow during the news conference held at a Samsung headquarters in Seoul. “Although it has been lauded for being first-rate in technology and products, Samsung has faced harsh criticism.”

“This is my fault,” he said. “I apologize.”

Over the decades, Samsung and its top leaders have often apologized for bribery, tax-evasion and other crimes. But corruption scandals have continued at Samsung, South Korea’s largest and most profitable business group.

Both analysts and critics have said that those scandals stemmed largely from the Lee family’s attempts to ensure a father-to-son transfer of managerial power over Samsung at all costs, even if that meant breaking laws and buying political influence.

On Wednesday, Mr. Lee accepted such criticism.

“All of the problems basically started from this succession issue,” Mr. Lee said. “From now on, I will make sure that no controversy happens again regarding the succession issue.”

Mr. Lee said he had no intention of bequeathing managerial powers to his own children and vowed to give professional managers greater roles in Samsung.

The Samsung scion still faces his own legal issues, in a courtroom back and forth that has kept his name and the name of his empire in the headlines.

In 2017, Mr. Lee was sentenced to five years in prison for providing Ms. Park and one of her friends with $7 million in bribes to obtain the government’s support for a merger of two Samsung affiliates that was seen as crucial to tightening Mr. Lee’s control over the Samsung conglomerate.

Then, in February 2018, an appeals court judge reduced Mr. Lee’s prison term to two and a half years and suspended the sentence, releasing him from prison. The appeals court judge ruled that the amount of bribes Mr. Lee provided was less than half of the sum determined by the trial court.

That was not the end of the matter. In August, the Supreme Court of South Korea ruled that the appeals court had underestimated the value of the bribes, and sent the case back to the lower court for retrial. That raised the possibility that Mr. Lee could be imprisoned again.

More setbacks followed.

In two separate court rulings in December, 39 people — most of them current or former Samsung managers — were convicted of conspiring illegally for years to sabotage efforts to organize independent unions at two Samsung affiliates and their subcontractors, and of plotting to keep the conglomerate free of union activism.

Several top Samsung figures — including Lee Sang-hoon, chairman of Samsung Electronics’ board of directors and widely considered the No. 2 figure in the conglomerate’s hierarchy — were sent to prison.

In October, the appeals court judge reconsidering Mr. Lee’s case ordered Samsung to present a plan on how to ensure that the conglomerate would not break laws again. Samsung launched its “compliance commission” in January.

The commission has since made a series of recommendations for Samsung, including ending its “no-union management” and apologizing for the corruption scandal.

On Wednesday, Mr. Lee was acting upon the committee’s recommendations.

“From now on, I will make sure that Samsung is no longer accused of pursuing no labor union management,” he said, adding that Samsung will respect South Korea’s constitutionally guaranteed right for workers to form independent unions.

Critics have said that the appeals court judge’s order and the compliance committee’s recommendations were nothing but an attempt to create a pretext to give Mr. Lee a lenient prison term and keep him out of prison. His father, Lee Kun-hee, was convicted twice of bribery and other corruption charges, but never spent a day in prison.

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