Monday, March 29, 2010

LAT: Lee's Samsung return is déjà-vu all over again

The Los Angeles Times has a piece talking about South Korea's revolving door of ethics whereby industrial giants get in hot water for legal or ethical lapses, only to be restored to their lofty positions later on, as in the case of recently rehabilitated Samsung CEO Lee Kunhee:
In recent years, executives at some of South Korea's top companies have been convicted of crimes such as accounting fraud, embezzlement and breach of duty.

Their sentences reduced, many have returned to their jobs. Some never left them.

"Most of the chairmen at the 10 biggest companies are convicts," said Kim, a senior official at the Citizens' Coalition for Economic Justice, which has lobbied for more accountability from South Korean companies. "They were prosecuted. They were given a suspended sentence, and then returned to work. It's repetitive."

Unlike many others, Lee is a two-time offender.

South Korea's richest tycoon, who is considered a near demigod here for his Midas touch and shrewd business acumen, has led a charmed life of near criminal disasters followed by generous boardroom second chances.

Lee, now 68, took the helm at the parent Samsung Group in 1987, and revenue for the world's second-largest chip maker jumped tenfold to $174 billion by 2007, according to company data.
And therein lies the problem: many in these positions are seen as too-high-to-fail, placing them in a situation where their removal could spell disaster, or at least is feared to spell disaster.

Of course, South Korea is not alone in this regard. Off the top of my head I can think of Apple and Steve Jobs, who is seen as a savior and demigod, not unlike Mr Lee. Apple and Steve Jobs got into could have been serious legal trouble for illegal stock backdating, but most everyone wanted to brush it off. (On an unrelated note, in my search for Apple+stock+manipulation, I found this interesting bit on stock price manipulation through media buzz.) I don't like the level of corruption that has passed for normal operating procedure for so long in South Korea, and I hope to see more change (though the change may not be complete until the current crop of CEOs are dead or retired), but let's not even pretend that it's somehow unique.

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