Samsung Probe Underlines Lax Rule of Law

Posted by: Ihlwan Moon on April 21, 2008

In announcing findings of a sweeping probe into Samsung Group, South Korea’s legal elite again displayed its tendency to leniently punish white-collar crimes. And as long as foul plays conducted by the rich and the powerful are not severely punished, the country isn’t likely to establish a solid rule of law.

Wrapping up more than three months of investigation into governance abuses of Korea’s largest chaebol, special prosecutor Cho Joon Woong said on Apr. 17 Samsung Chairman Lee Kun Hee and 9 of his top execs should not be arrested despite “grave crimes” they committed by evading “astronomical” amounts of taxes and taking big profits through illegal business practices. The reason: Their arrest will lead to “an enormous vacuum” in Samsung’s management and “huge negative impacts” in the Korean economy.

Cho also argues that although the country’s laws must be equitably applied to every person, it doesn’t mean to completely ignore factors such as the “individual peculiarities or the circumstances of a given time.” To many Koreans, his words sound like: if you want special treatment, you should become influential figures such as chiefs of large conglomerates.

In recent history chaebol chieftains have escaped prolonged jail time because judges have often been lenient towards corporate leaders convicted of wrongdoing, saying jailing them could hurt Korea’s economy. They include the heads of SK, Hyundai Motor, Hanwha, Doosan and Daewoo. Labor union leaders resent this, and as long as corporate chiefs are perceived as being “unclean,” Korea’s often violent unions won’t likely end “irregular” labor strife any time soon.

Reader Comments

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April 22, 2008 1:38 AM

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April 22, 2008 8:00 PM

Each country has its own culture and business practice to run a business. When the market of one country expands to the global market, that is a time to adapt and learn from other partners in order to keep abreast with rivals. In one organization, the working environment must play a positive role to encourage everyone to contribute more to the whole cooperative. The regulations are recited and informed to new employees on a orientation day and regularly discussed in a group model.

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