Samsung heir apologizes over corruption scandal

Lee Jae-yong, vice-chairman of Samsung Electronics, was jailed for five years in 2017 for bribery, embezzlement and other offenses in connection with the scandal that brought down South Korean president Park Geun-hye. (Reuters)
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Updated 06 May 2020

Samsung heir apologizes over corruption scandal

  • ‘I will make sure that there will be no more controversy over the succession of management’
  • ‘I will never take any actions that go against the law’

SEOUL: The heir to the Samsung empire bowed in apology Wednesday for company misconduct including a controversial plan for him to ascend to the leadership of the world’s largest smartphone maker.
Lee Jae-yong is vice-chairman of Samsung Electronics and was jailed for five years in 2017 for bribery, embezzlement and other offenses in connection with the scandal that brought down South Korean president Park Geun-hye.
The 51-year-old was released a year later on appeal but is currently undergoing a retrial.
“Our technology and products are being hailed as first-class but the public gaze toward Samsung still remains harsh,” Lee said. “This is my fault. I apologize.”
Lee bowed three times before flashing cameras at a Samsung Electronics office in Seoul, where reporters sat apart under coronavirus distancing rules.
He will not allow his children to succeed him at the firm, he said in steady tones, swallowing occasionally.
“I will make sure that there will be no more controversy over the succession of management,” Lee said, adding: “I will never take any actions that go against the law.”
Wednesday’s apology came at the request of Samsung’s compliance committee, which oversees the firm’s transparency in its corporate dealings.
Lee has effectively been at the helm of the sprawling Samsung group since his father and group chairman Lee Kun-hee was left bedridden by a heart attack in 2014.
The court case centered on millions of dollars the Samsung group paid Park’s secret confidante Choi Soon-sil, allegedly for government favors including ensuring a smooth transition for Lee to succeed his ailing father.
The scandal highlighted shady connections between big business and politics in South Korea, with the ousted president and her friend accused of taking bribes from corporate bigwigs in exchange for preferential treatment.
Samsung Electronics is the flagship subsidiary of the group, which is by far the biggest of the family-controlled conglomerates, or chaebols, that dominate business in the world’s 12th-largest economy.
Its overall turnover is equivalent to a fifth of the national gross domestic product and it is crucial to South Korea’s economic health.
Chairman Lee Kun-hee is listed as South Korea’s richest man — and the world’s 65th — by Bloomberg Billionaires, with a fortune estimated at $15.7 billion, while Lee Jae-yong has a separate listing of his own, and a net worth of $5.7 billion.
In March, the Samsung compliance committee — which was set up in response to a court order — said many “disgraceful” incidents involving the Samsung Group were linked to an alleged succession scheme for Lee and advised him to apologize publicly.
It also recommended that Lee address Samsung’s previous “no labor union” policy.
For almost 50 years Samsung successfully avoided the unionization of its workers — sometimes adopting ferocious tactics according to critics — until last November.
“I sincerely apologize to everyone who has been hurt by issues involving Samsung’s labor union policy,” Lee said.
The company will guarantee workers’ rights and act in accordance with employment regulations, he added.
Samsung reported a slight fall in first quarter net profits last month at 4.88 trillion won ($4 billion), citing impacts of the coronavirus pandemic.
But the firm — which saw operations suspended at 11 overseas assembly lines — warned of further falls to come as consumer demand is “significantly” hit by the disease.


Tanker off UAE sought by US over Iran sanctions ‘hijacked’

Updated 16 July 2020

Tanker off UAE sought by US over Iran sanctions ‘hijacked’

  • The circumstances of the hijack are still unclear and the boat has been tracked to Iranian waters

DUBAI: An oil tanker sought by the US over allegedly circumventing sanctions on Iran was hijacked on July 5 off the coast of the UAE, a seafarers organization said Wednesday.

Satellite photos showed the vessel in Iranian waters on Tuesday and two of its sailors remained in the Iranian capital.

It wasn’t immediately clear what happened aboard the Dominica-flagged MT Gulf Sky, though its reported hijacking comes after months of tensions between Iran and the US

David Hammond, the CEO of the United Kingdom-based group Human Rights at Sea, said he took a witness statement from the captain of the MT Gulf Sky, confirming the ship had been hijacked.

Hammond said that 26 of the Indian sailors on board had made it back to India, while two remained in Tehran, without elaborating.

“We are delighted to hear that the crew are safe and well, which has been our fundamental concern from the outset,” Hammond told The Associated Press.

Hammond said that he had no other details about the vessel.

TankerTrackers.com, a website tracking the oil trade at sea, said it saw the vessel in satellite photos on Tuesday in Iranian waters off Hormuz Island. 

Hormuz Island, near the port city of Bandar Abbas, is some 190 kilometers (120 miles) north of Khorfakkan, a city on the eastern coast of the United Arab Emirates where the vessel had been for months.

The Emirati government, the US Embassy in Abu Dhabi and the US Navy’s Bahrain-based 5th Fleet did not respond to requests for comment. Iranian state media did not immediately report on the vessel and Iran’s mission to the United Nations did not immediately respond to a request for comment.

In May, the US Justice Department filed criminal charges against two Iranians, accusing them of trying to launder some $12 million to purchase the tanker, at that time named the MT Nautica, through a series of front companies. 

The vessel then took on Iranian oil from Kharg Island to sell abroad, the US government said.

Court documents allege the scheme involved the Quds Force of Iran’s paramilitary Revolutionary Guard, which is its elite expeditionary unit, as well as Iran’s national oil and tanker companies. The two men charged, one of whom also has an Iraqi passport, remain at large.

“Because a US bank froze the funds related to the sale of the vessel, the seller never received payment,” the Justice Department said. “As a result, the seller instituted a civil action in the UAE to recover the vessel.”

That civil action was believed to be still pending, raising questions of how the tanker sailed away from the Emirates after being seized by authorities there.

Data from the MT Gulf Sky’s Automatic Identification System tracker shows it had been turned off around 4:30 a.m. on July 5, according to ship-tracking website MarineTraffic.com. Ships are supposed to keep their AIS trackers on, but Iranian vessels routinely turn theirs off to mask their movements.

Meanwhile, the 28 Indian sailors on board the vessel found themselves stuck on board without pay for months, according to the International Labor Organization. It filed a report saying the vessel and its sailors had been abandoned by its owners since March off Khorfakkan. The ILO did not respond to a request for comment.

As tensions between Iran and the US heated up last year, tankers plying the waters of the Mideast became targets, particularly near the crucial Strait of Hormuz, the Arabian Gulf’s narrow mouth through which 20 percent of all oil passes. Suspected limpet mine attacks the US blamed on Iran targeted several tankers. Iran denied being involved, though it did seize several tankers.