Tag: arrested

Samsung Chairman Under Investigation For US $4.2 Billion Tax Fraud

Samsung has had an excellent financial year so far. All three of its flagship phones have been received well and performed well in the market. However, organisationally, the South Korean tech giant has had a rough patch. Now, it appears that authorities in South Korea are still going after the family that runs the Samsung empire. Samsung’s Chairman Lee Kun-hee has allegedly used accounts opened under borrowed names to withdraw money from the company and avoid taxation.

The accounts have been used for illegal transfer of wealth from Lee’s father, the founder of Samsung, Lee Byung-chull, and the sum has been estimated around to be $4.2 billion.

Reports suggest that the authorities are looking to tax the money that was illegally withdrawn. According to the country’s Act on Real Name Financial Transactions and Confidentiality, interest and dividend income obtained on borrowed names can be taxed by up to 90%.

This is just one of the many organisational controversies surrounding Samsung’s founding family.

In October, Kwon Oh-hyun, CEO of Samsung Electronics and Samsung Display, vice chairman and head of Samsung’s components division announced his resignation. He will step down from the role as well as his position on the board in March 2018.

In February, Samsung’s vice chairman Lee Jae-yong was arrested in South Korea for charges of bribery and of hiding criminal proceeds and violating laws pertaining to transferring assets abroad.

December 1, 2017
Samsung CEO Kwon Oh-hyun Resigns Under Mysterious Circumstances

Kwon Oh-hyun, CEO of Samsung Electronics and Samsung Display, vice chairman and head of Samsung’s components division has announced his resignation. He will step down from the role as well as his position on the board in March 2018.

Kwon Oh-hyun said in a letter to the employees:

It is something I had been thinking long and hard about for quite some time. It has not been an easy decision, but I feel I can no longer put it off. As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry.

There are no words to describe how proud I am that we built together one of the most valuable companies in the world. We have come a long way to create a company that truly changes how people live, work and communicate with each other. But now the company needs a new leader more than ever and it is time for me to move to the next chapter of my life.

Kwon joined Samsung in 1985, rising to lead its semiconductor business before his appointment as the CEO. He was appointed CEO of Samsung Electronics in 2012 and in 2016, he became the CEO of Samsung Display.

Samsung has had a very successful finanical year but, all may not be well in its leadership. The South Korean tech giant, Samsung expects its operating profit to nearly triple year on year, demonstrating a very strong recovery after the equivalent period in 2016 saw the infamous Galaxy Note7 recall. In his letter, Kwon cites “unprecedented crisis,” he might be referring to the arrest of Lee Jae-yong, the de facto leader of the entire Samsung group, on corruption charges. It looks like the scandal will slowly show the repercussions and Kwon Oh-hyun’s resignation seems like the fist indication. Samsung is yet to announce a replacement. It seems like one of the two “co-CEOs”, BK Yoon and JK Shin would replace Kwon. Will this internal turmoil affect Samsung and its future plans? We don’t think so.

October 13, 2017
Samsung South Korea Leader Arrested for Bribery

Samsung’s vice chairman Lee Jae-yong has been arrested in South Korea for charges of bribery and of hiding criminal proceeds and violating laws pertaining to transferring assets abroad. The court had found him guilty in January of 2017, but a warrant for his arrest was made only yesterday for the remaining charges.

The rationale for and the necessity of (Lee’s) arrest is acknowledged considering the new charges and additional evidence collected- Said the court

The charge of significant proportions putts Lee Jae-yong for bribing the South Korean President Park Geun-hye $38 million for allowing special privileges to Samsung as a brand. The stories of Samsung being a company that has its roots stuck with bribery have been around since the time the founder of the company was charged with illegal business practices.

It just seems that the company cannot catch a break, failed Note 7, massive losses in the stock market and now this. The fy16-17 for Samsung has really not been good.

February 17, 2017