Published: Sun, February 26, 2017
Tech | By Constance Martin

Samsung Group president and vice chairman offer to resign amidst bribery scandal

Samsung Group president and vice chairman offer to resign amidst bribery scandal

Previously, only payments representing 0.5 percent of shareholder equity - 680 billion won or more - required board approval. I'm talking about the fact that Lee Jae-yong, who is Samsung's vice chairman and current acting leader, has been arrested on charges that he attempted to bribe the president of South Korea.

"This move improves transparency in financial aid and appropriation of social corporate social responsibility funds, and strengthens compliance management", the company said in a statement. Samsung Group's President Chang Choong-gi and the conglomerate's Vice Chairman Choi Gee-sung have allegedly offered their resignations on Friday, anonymous sources familiar with the situation have said.

The secretive top policy-making Future Strategy Office of Samsung Group that came under spotlight for arranging donations for Choi Soon-sil and her inner circle in return for favors from President Park Geun-hye would formally come down next week.

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From today, Samsung requires all donations over 1 billion won ($883,680) to be approved by the board of directors and for payments to be shared publicly via South Korea's financial regulator. Choi has played the role of mentor to the Samsung heir.

Though Samsung Group and Lee have denied paying bribes to Park or seeking improper favors, the conglomerate has pledged to take steps to improve transparency amid accusations and criticisms that Samsung used its financial might to game the system in its favor. As such, his exit could throw the top leadership in chaos. Both executives were identified as suspects by the South Korean special prosecution in a graft probe that led to Samsung Group leader Jay Lee's arrest last week.

Were these executives to leave too, Samsung could be in trouble. While most industry watchers believe Lee's arrest won't necessarily affect Samsung in the short term, the company's global strategy pertaining to mergers and acquisitions may be affected if Lee ends up getting a prison sentence.

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