With a scandal embroiling Samsung (SSNLF), South Korea’s largest electronics company, two senior executives have said they will resign and take responsibility for the company’s involvement in a bribery case that resulted in the impeachment of South Korean President Park Geun-hye and the arrest of Jay Y. Lee, vice chairman of Samsung Electronics.
According to a report on CNBC, which cited the Yonhap News Agency, Vice Chairman Choi Gee-sung and President Chang Choong-gi have said they would step down from the company. The report from Yonhap, which wasn’t sourced, didn’t say if the two have submitted their resignations on a formal basis and whether they will stay on at Samsung in some capacity. The two executives were named as suspects in the probe.
Lee Said He Is Innocent
Lee and his co-executives are alleged to have paid some 30 billion won ($25.46 million) to businesses and foundations backed by President Park Geun-hye's friend, Choi Soon-sil, in exchange for the National Pension Service's (NPS) support for a 2015 merger of two Samsung affiliates. The NPS is also the largest shareholder in many of South Korea's biggest companies. Samsung Group, which oversees nearly 60 affiliate companies from electronics and appliances to insurance and pharmaceuticals, had consistently denied the allegations before Lee’s arrest.
Lee, who has claimed he is innocent, is being held in a cell and is not allowed to have contact with any of the other inmates, reported CNBC, citing an official at the Seoul Detention Center. The report noted Lee is being held in a single cell because prosecutors don’t want Lee talking to anyone involved in the case. There’s also concerns about safety for the billionaire. Lee, the third-generation leader of Samsung—South Korea's largest conglomerate—was appointed to the role of inside director of Samsung Electronics in November after a shareholders' meeting following the exploding Galaxy Note 7 battery issue.
For Samsung, the bribery scandal, Lee's arrest and now two more executives coming forward is just yet another embarrassing and costly hit. The recall and cancelation of the Galaxy Note 7 has not only hurt sales at Samsung Electronics but also negatively impacted its reputation. But while consumers are quick to forget, particularly when a new flashier smartphone hits the market, the bribery scandal and Samsung’s involvement may not soon be forgotten.