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Samsung chair steps down amidst controversy

Posted: 24 Apr 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Samsung bribery scandal? Samsung chairman? slush funds?

Less than a week after he was charged with tax evasion and breach of trust, Lee Kun-hee, the embattled Samsung Group chairman, announced his resignation, according to the BBC News.

The charges followed the three-month probe into alleged corruption at the South Korea-based company. The investigation, however, cleared Samsung of allegations by former legal affairs executive Kim Yong-chul that it had used a multimillion dollar slush funds to bribe prosecutors and judges.

Lee made his public announcement at a nationally televised press conference. He apologized for the trouble the special probe caused the nation and said he will take full responsibility for everything, both legally and morally.

Damage control
Lee was indicted Apr. 17 but was not formally arrested. Prosecutors said the former Samsung head would remain free pending his trial. They explained that arresting Lee would cause enormous disruption to Samsung's business, which in turn could result in negative repercussions for South Korea.

In a statement, the prosecutors said Samsung had a lot of "structural problems," including "illicit transfer of management control," which was exposed by Kim on live TV last November. The former legal officer of Samsung accused Lee and other executives of using illegal accounting techniques to covertly transfer control of the business to Lee's son.

Without admitting or denying any wrongdoing, Lee stated in a subsequent interrogation that he assumed responsibility for the problems at the company and might even consider stepping down. Samsung apologized for the damage the scandal had caused on its reputation and vowed to reform its practices.

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