By Don Southerton, Korea Expert Witness Editor and Chief Blogger
Amid threats from North Korea and the death of former South Korean president Roh Moo-hyun, news about Samsung former chairman Lee Kun-hee drew little attention. Ironically, Roh Moo-hyun’s administration had spend considerable time and effort to regulate and investigate the heads of Korea’s major business groups. Over the years, SK, Hyundai Motor, and Samsung weathered numerous investigations, with many of their top leadership being prosecuted.
Most often the practices of the family-run Group’s drawing scrutiny were attempts to transfer wealth to the next generation–with inheritance taxes up to 50%.
Korea media and the NYT notes- South Korea’s Supreme Court said it is upholding a lower court’s ruling that found former Samsung Group Chairman Lee Kun-hee not guilty of allegations of dubious bond transactions aimed at transferring corporate governance to his only son.
The ruling came after the court also overruled an appellate court’s guilty verdict on two former Samsung executives. The two were indicted of allegedly helping Lee Kun-hee’s son, Lee Jae-yong, purchase convertible bonds in Samsung Everland, the Samsung Group’s de facto holding company, at a lower market price, allowing him to take over the group.
“Since the purpose of the [convertible bond] issuance was not aimed at raising funds but was at transferring the company’s governance, that cannot be seen as causing losses to the company,” the Supreme Court said in a statement.
The 67-year-old Lee Kun-hee, who led the country’s biggest conglomerate by assets for about 20 years, quit the group and flagship Samsung Electronics Co. after being indicted of tax-evasion and breach-of-trust charges in April last year.
In October last year, Lee Kun-hee was given a three-year jail term that was suspended for five years and a 110 billion won ($87.2 million) fine for tax evasion.