SEOUL: The jailed de facto leader of the giant Samsung group went on trial Thursday over an allegedly manipulated takeover in proceedings that effectively put South Korea’s system of conglomerate control in the dock.
Samsung — whose flagship subsidiary is among the world’s biggest smartphone and computer chip makers — is by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th-largest economy.
Chaebol families often have only a small ownership stake in their empires, but maintain control through complex webs of cross-shareholdings between units.
Lee Jae-yong, the vice-chairman of Samsung Electronics and the grandson of the group’s founder, is accused of stock manipulation, breach of trust and other offenses when two other subsidiaries, Samsung C&T and Cheil Industries, merged in 2015.
A court spokesman confirmed to AFP that Lee was present in court.
Lee was the largest shareholder in Cheil Industries, and critics say Samsung sought to artificially lower the price of C&T to give him a bigger stake in the merged entity — a key part of the Samsung structure — consolidating his grip on the conglomerate ahead of his father’s death last year.
He is already serving a two-and-a-half year prison sentence for bribery, embezzlement and other offenses in connection with the corruption scandal that brought down South Korean president Park Geun-hye.
Lee’s father, Samsung chairman Lee Kun-hee, died in October, leaving his heirs a vast fortune and an inheritance tax bill of around 13 trillion won ($11.7 billion), with the first instalment due by the end of this month.
Samsung is crucial to South Korea’s economic health, and is active in sectors ranging from construction to health care to insurance.
But Vladimir Tikhonov, professor of Korean Studies at the University of Oslo, told AFP: “The most problematic aspect is the attempted continuation of the unchallenged dynastic rule over a company which is responsible over 20 percent of South Korea’s GDP.
“Samsung’s main stakeholders are its shareowners, including the minor ones, its workers and South Korean society as a whole,” he said.
“It is too big to be a dynastic property.”
The trial was originally due to start last month but was delayed when Lee had emergency surgery for appendicitis.
He apologized last May for some governance issues at the group, pledging to ensure “there will be no more controversy over the succession” and that he would not allow his children to take over from him at the firm.
Samsung boss on trial over ‘manipulated’ takeover deal
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Samsung boss on trial over ‘manipulated’ takeover deal
- Lee Jae-yong, the vice-chairman of Samsung Electronics and the grandson of the group’s founder, is accused of stock manipulation, breach of trust and other offenses
Saudi minister at Davos urges collaboration on minerals
- The reason of the tension of geopolitics is actually the criticality of the minerals
LONDON: Countries need to collaborate on mining and resources to help avoid geopolitical tensions, Saudi Arabia’s minister of industry and mineral resources told the World Economic Forum on Tuesday.
“The reason of the tension of geopolitics is actually the criticality of the minerals, the concentration in different areas of the world,” Bandar Alkhorayef told a panel discussion on the geopolitics of materials.
“The rational thing to do is to collaborate, and that’s what we are doing,” he added. “We are creating a platform of collaboration in Saudi Arabia.”
The Kingdom last week hosted the Future Minerals Forum in Riyadh. Alkhorayef said the platform was launched by the government in 2022 as a contribution to the global community. “It’s very important to have a global movement, and that’s why we launched the Future Minerals Forum,” he said. “It is the most important platform of global mining leaders.”
The Kingdom has made mining one of the key pillars of its economy, rapidly expanding the sector under the Vision 2030 reform program with an eye on diversification. Saudi Arabia has an estimated $2.5 trillion in mineral wealth and the ramping up of extraction comes at a time of intense global competition for resources to drive technological development in areas like AI and renewables.
“We realized that unlocking the value that we have in our natural resources, of the different minerals that we have, will definitely help our economy to grow to diversify,” Alkhorayef said. The Kingdom has worked to reduce the timelines required to set up mines while also protecting local communities, he added. Obtaining mining permits in Saudi Arabia has been reduced to just 30 to 90 days compared to the many years required in other countries, Alkhorayef said.
“We learned very, very early that permitting is a bottleneck in the system,” he added. “We all know, and we have to be very, very frank about this, that mining doesn’t have a good reputation globally.
“We are trying to change this and cutting down the licensing process doesn’t only solve it. You need also to show the communities the impact of the mining on their lives.”
Saudi Arabia’s new mining investment laws have placed great emphasis on the development of society and local communities, along with protecting the environment and incorporating new technologies, Alkhorayef said. “We want to build the future mines; we don’t want to build old mines.”
