Samsung Electronics Vice Chairman Lee Jae-Yong on Tuesday was questioned at a parliamentary hearing on his possible involvement with President Park Geun-Hye. This was a rare glimpse into Lee Jae-Yong the heir apparent to the Samsung empire. He has rarely done interviews or speeches and many Koreans wondered about his ability to run a major conglomerate like Samsung. Well after this hearing broadcast live on social media and network television, it is safe to say his reputation as a savvy businessman and quick thinking executive has been tarnished. Many would say he had no reputation to begin with, however his stumbling responses when responding to lawmaker’s, many from the three main opposition parties, has put doubt in whether Lee Jae-Young is a qualified heir to the Samsung empire.
Lee Jae-Yong along with other executives from Samsung were at the hearing on allegations they donated tens of million of dollars to two non-profit foundations which were run by Choi Soon Sil who has already been charged with extortion as well as abuse of power. Time and time again Lee Jae-Yong denied bribery allegations regarding the merger of two subsidiaries of Samsung.
“The merger of two companies has nothing to do with the transfer (of management control) for me and any other.”
The allegation is that Samsung made donations in return for support from the national pension fund from last year’s merger of Samsung C&T and Cheil Industries. Lee claimed that the donation had nothing to do with gaining support from the Korean government. Lee had a meeting with President Park back in July of 2015 as well as in February of 2016. Lee said the conversation centered around his “support” for the cultural development projects through the foundations and claims there was no mention of Ms. Choi’s involvement in the foundations. The merger of the Samsung C&T and Cheil Industries was a crucial deal for Lee as it gave him management control over Samsung. However, Lee said during the hearing that the deal was not done for his personal gain. One of the boldest claims from Lee was that he was initially unaware of donations made by Samsung affiliates to the two foundations.
“I wasn’t aware of Samsung’s payment to the two foundations, and I was only briefed after the fact,” Mr. Lee said.
This is very hard to believe as it would mean either A) Lee Jae-Yong was not consulted with in regarding large donations B) Lee is trying to distance his connection to the foundations. There were many conglomerate executives at the hearing but Lee came out looking the worst. Lee was lectured on and continually interrupted. In total, more than 80% of the questions were asked to Lee. The responses from the other major conglomerates were short and scripted.
In the end, Lee Jae-Yong promised to shut down an office called the “control tower” in Samsung which does major deals and management dealings. This is the office within Samsung that has the connection to the two foundations. Disengage in activities with the Federation of Korean Industries which were also a part of the fundraising for the two foundations. He also promised to withdraw Samsung from lobby groups for business interests. Lastly on several occasions, he said he feels grave responsibility in the wake of the scandal.
As the hearing drew to a close many are now focusing on what the lawmakers will do to President Park. She will face an impeachment vote this Friday.