[Times Editorial] Samsung’s Slush Fund

[운영자]

[Times Editorial] Samsung’s Slush Fund

Businesses Still Have Long Way to Ensure Transparency

It is a pity that Samsung Group chairman Lee Kun-hee allegedly ordered the illegal lobbying of politicians and public prosecutors to seek favors for the nation's largest conglomerate. The Catholic Priests Association for Justice (CPAJ) plans to disclose details today on allegations the group has been operating slush funds in accounts under the names of its former and current employees. This shows the nation's businesses have long way to go to ensure much-needed managerial transparency. 
 
Kim Yong-chul, 49, an attorney who served as chief of Samsung's legal affairs team until 2004, is claiming he was in charge of bribing influential prosecutors, providing them with 5 to 10 million won each on the occasion of national traditional holidays. The CPAJ submitted documents that showed Lee's points of direction regarding lobbying the powerful figures. The document included such phrases as ``Is it smoother to provide hotel discount coupons to the people who don't accept cash?'' and ``There would be no problem to offer quality wines to those well versed with such alcoholic beverage.'' It also revealed Lee had directly engaged in the management of affiliates ranging from selling off of buildings to recruiting human resources.

Samsung has acknowledged the existence of such a document but has rejected the claim that chairman Lee made such orders. ``It is a simple memo of the chairman's statement which was supposed to be used for reference only,'' a Samsung official said. But it is surprising chairman Lee also ordered steps to use the mass media to create public opinion favorable to the group even at the cost of undermining Samsung's rival companies like LG, in particular. ``LG has engaged in dumping sales in overseas markets. It is better to generate opinion on the effect in case the companies fairly compete with the conclusion that such dumping marketing would lead to common failures,'' it said.

We vividly remember how disgraced Hanhwa Group chairman Kim Seung-youn mobilized company employees and money to alleviate mounting repercussions against his attack on bar employees in revenge for his son. Tycoons of chaebol are asked to stop the emperor-like management. We urge the prosecution to embark on a full-fledged investigation to get the real picture of the allegation.

If the lawyer's claim is found to be true, the act of managing the funds in alias names would violate laws on real name transactions and the group will need to be charged with bribery. We also urge the nation's tax and financial supervisory authorities to take due measures for the inspection of relevant banks. Shedding light on the recent case will help improve the managerial transparency of Samsung and prevent it from engaging in such activities in the future, giving it a chance to be reborn as the nation's top conglomerate in the real sense of the word.