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A Place holding Samsung’s Philosophy Subject to Investigation

A Place holding Samsung’s Philosophy Subject to Investigation

Posted January. 15, 2008 06:37,   


After a special investigation team led by Cho Jun-woong began ransacking offices and homes of top executives yesterday, Samsung Group appeared seriously embarrassed. Samsung sources could not hide their embarrassment since Samsung Chairman Lee Kun-hee’s office Seungjiwon was also on the search list. They said, “It is the first time for Samsung chairman’s office to be ransacked since the group was established 70 years ago.”

Seungjiwon, located in Itaewon-dong, Yongsan-gu, Seoul, had been inhabited by the Samsung founder, late Lee Byung-chul, and has been used as Chairman Lee Kun-hee’s office-cum-guest house since the founder passed away in 1987.

Chairman Lee has rarely gone to work at the Samsung headquarters in Taepyeongno, Jung-gu, Seoul, saying, “My existence can put burden on presidents’ autonomous management.” He usually worked at Seungjiwon. That’s why Samsung employees have considered Seungjiwon as the place where decisions are made and the founder’s spirit and Samsung’s philosophy permeate.

A Samsung executive working at the strategy and planning department said, “We’ve somewhat expected that the investigation team would ransack our headquarters and Samsung subsidiaries including Samsung Corporation. However, we’ve never dreamt of a raid on Seungjiwon.” “We’re really embarrassed since we don’t know what kind of information the investigation team has secured,” he added.

After yesterday’s search, some even predict that the investigation team may either ransack Chairman Lee’s private residence in Hannam-dong, Yongsan-gu, Seoul, or summon Lee Kun-hee. Samsung Group is concerned that if the special investigation team called in Lee Kun-hee, it would negatively affect not only the chairman himself but also credit ratings of the group at home and abroad.

Samsung’s Chairman Lee was once summoned by the prosecutors in 1995 when the group was reportedly involved in former President Roh Tae-woo’s slush fund scandal, but he was indicted without custody. However, Samsung officials estimate that the aftermath of the investigation team’s summons of Lee will be far worse, given Samsung’s status as a global company representing Korea.

Meanwhile, Samsung employees subject to yesterday’s raid are in charge of the group’s financial affairs. They are also considered to have a deep understanding of the suspicions over the group’s slush fund and succession issues.

Vice President Lee Hak-soo, heading the group’s strategy and planning department, is a chief executive officer but he has been known to be closely involved in the management of the group and Chairman Lee’s right-hand man. President Kim In-ju, leader of strategic support team belonging to the strategy and planning department, has been in charge of the group’s finance. Other three executives whose houses were raided yesterday have also been involved in the group’s financial affairs.

With the special team beginning a full-scale investigation, many of the nation’s businesses including Samsung Group say, “Such an investigation is inevitable. But we expect that the investigation team will finish its job as soon as possible so as to minimize damage done to Samsung Group’s value and its global management.”