Samsung to disband office
Samsung will disband its corporate strategy office after a special prosecution probe ends, setting a timeline on a pledge to wind up a power centre criticised for its role in a graft scandal.
Samsung Group said it would disband its corporate strategy office after a special prosecution probe ends, setting a timeline on a pledge to wind up a power centre that has been criticised for its role in South Korea’s infamous graft scandal.
The strategy office, consisting of about 200 elite staff handpicked from affiliates of the nation’s top conglomerate, is the vehicle through which the founding Lee family makes key decisions such as restructuring and investments for new businesses, insiders and analysts say. It has been under intense scrutiny as the South Korean special prosecutor’s office investigated the smart phones to-bi op harm ace utica ls business empire as part of a wider investigation into the scandal that threatens to permanently unseat President Park Geun-hye.
Special prosecution has classified Jay Y Lee, third generation leader of Samsung Group, and head of the corporate strategy office Choi Geesung as suspects in its bribery investigation on suspicions that Samsung paid money to organisations linked to Park’s confidant, Choi Soon-sil, to pave the way for a 2015 merger of two affiliates.
Other executives from the strategy office have also been questioned by investigators on suspicions the office was involved in the lobbying process on the merger deal, heaping pressure for its closure. “Action will be taken following the conclusion of the special prosecutor’s investigation,” Samsung said in a brief statement, adding that preparations were already under way.
Lee, who assumed leadership of Samsung after his father Lee Kun-hee was incapacitated by a May 2014 heart attack, said in a December parliament hearing over the graft scandal that he planned to disband the office but did not give a specific timeline.
NERVE CENTRE
Known informally as the “control tower”, Samsung’s corporate strategy office is the nerve centre of the $239bn business empire since the office was created in December 2010.
THE OFFICE IS THE VEHICLE THROUGH WHICH THE FOUNDING LEE FAMILY MAKES KEY DECISIONS
The office does not exist as a legal entity and its executives and employees are technically on the payroll of affiliates such as flagship Samsung Electronics. Samsung on Monday declined to comment on how the conglomerate planned to perform the functions of the strategy office after it was disbanded.
Park Ju-gun, head of corporate analysis firm CEO Score, said the conglomerate still needed a way to co-ordinate grouplevel affairs and maximise synergies among Samsung firms.
He said Samsung would likely recreate an office similar to the corporate strategy office in the future, albeit with reduced responsibilities in terms of protecting the Lee family’s interests.