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.


Oil falls as rising virus cases overshadow demand recovery

An oil tanker ship at a port in Burgas, Bulgaria. Most market participants expect more downward pressure on oil, with COVID-19 ravaging the landscape. (Shutterstock)
Updated 05 August 2020

Oil falls as rising virus cases overshadow demand recovery

  • Declines come after WTI rose 1.8% and Brent climbed 1.5% on Monday; renewed lockdowns weigh on prices

LONDON: Oil prices eased on Tuesday on concerns that a fresh wave of COVID-19 infections will hamper a global demand recovery just as major producers ramp up output.

US West Texas Intermediate (WTI) crude futures were down 67 cents, or 1.6 percent, at $40.34 a barrel, while Brent crude dropped 71 cents, or 1.6 percent, to $43.44.
The declines come after WTI rose 1.8 percent and Brent climbed 1.5 percent on Monday on better than expected data on manufacturing activity in Asia, Europe and the United States.
News from Asia and Europe is adding to concerns that the infection crisis may be spreading in a global second wave, not just in the United States and Brazil, said Paola Rodriguez Masiu of Rystad Energy.

HIGHLIGHTS

• News from Asia and Europe is adding to concerns that the infection crisis may be spreading in a global second wave, not just in the United States and Brazil, said Paola Rodriguez Masiu of Rystad Energy.

• Producers in the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, are raising output this month, adding about 1.5 million barrels per day of supply.

• Analysts estimate that US refined product stockpiles rose last week, according to a preliminary poll ahead of data from the American Petroleum Institute and the US government on Wednesday.

Denting fuel demand, cities from Manila to Melbourne are tightening lockdowns to battle new infections, while Norway has stopped cruise ship traffic in the latest European travel alarm.
In a further sign of a patchy rebound in demand, analysts estimate that US refined product stockpiles rose last week, according to a preliminary Reuters poll ahead of data from the American Petroleum Institute and the US government on Wednesday.
At the same time, producers in the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, are raising output this month, adding about 1.5 million barrels per day of supply. US producers also plan to restart shut-in production.
“Most oil market participants expect more downward pressure on oil ... with COVID-19 ravaging the landscape and OPEC+ adding more barrels into play,” said Stephen Innes, Chief Global Markets Strategist at AxiCorp.