Samsung is one of the biggest consumer products companies in the world. It makes everything from phones to refrigerators to televisions. But underneath the consumer goods a scandal has been brewing, and it has now engulfed the company’s vice chairman and heir apparent, Jay Y. Lee.
The scandal itself is fairly straightforward. Lee is accused of paying bribes to President Gun-Hye Park and presidential adviser Soon-sil Choi by donating large sums to non-profit foundations run by them. The trappings of the scandal have garnered international attention for their bizarre details: Choi claims to be channeling the spirit of Park’s dead mother and allegedly is the power behind the throne. Choi, despite having no government office, has been accused of everything from leaking classified documents to forcing a college to change its admissions criteria so her daughter could attend. Park has been impeached.
Lee’s role in the scandal is that he paid bribes to Choi and Park’s foundations so that a merger, between Cheil Industries, the holding company for the Lee family, and Samsung’s construction company Samsung C&T would be allowed to go through without objection. Samsung, despite its global reach and vast product line, is still technically a “family” company, run with an opaqueness some investors are fighting, and the merger consolidated the Lee family’s control.
An earlier request for an arrest warrant had been denied, but the charges against Lee have expanded since then. If Lee goes to jail, it would essentially render Samsung leaderless: Lee is the heir to the throne in many eyes and without him, and with Lee’s father facing a scandal of his own due to allegations of hiring prostitutes, the company may be left rudderless for a long, long time.
(via Reuters)