Trial of the Century

On 9 March 2017 a court case dubbed “the trial of the century” in South Korea began, with the heir apparent to the Samsung empire facing charges of bribery and embezzlement. The case is inextricably linked to that of disgraced President Park Geun-hye, whose own future will be decided this week when an eight judge panel decides whether she should be removed from office.

While the trial of Samsung vice chairman Lee Jae-yong will be closely scrutinised by the hundreds of thousands of people who crowded Seoul’s streets late last year to call for the impeachment of their president, experts believe that this is simply history repeating itself.

There may be some short-term impact, including bringing shame on the company and its founding family, but ultimately, business and politics in Korea will continue as normal.

Commenting on Samsung’s future, Joseph Fan, Professor of School of Accountancy and Department of Finance and Co-director of Centre for Economics and Finance at The Chinese University of Hong Kong Business School, told VICE News in an interview that “I think the business will continue as usual because we are talking about the surviving business model in this political and economic environment — so it is very hard to transform any company, including Samsung.”

Samsung is the largest of a unique Korean institution, known as a chaebol, a conglomerate of companies infused with Confucian values, family links and government influence. Lee, 48, is facing a range of corruption charges, most notably pledging bribes to a company and organisations linked to a friend of President Park, Choi Soon-sil who is at the center of the corruption scandal which has already led to the indictment of the president.

The reason the family has been able to continue to operate with apparent impunity is the unique relationship between government and big business in Korea. The importance of Samsung to the Korea can be seen when you consider that in 2012 it represented 20 percent the country’s US$1.1 trillion economy.

“The government has a long history of pushing the Korean economy by cultivating these tycoons,” said Prof. Fan.

The huge protests which brought down President Park and led to her indictment suggest there is an appetite for change within Korean culture, where government and big business are seen almost as a single entity.

“The government and business relationships will continue to be close, and there will always be corrupt bureaucrats to collude with the business sector,” said Prof. Fan… Read More (PDF)

Source: VICE News
Date published: 9 March, 2017

Photo: Lee Young Ho/SIPA—AP