SEOUL (Reuters) – Shares in Samsung Electronics and affiliates rebounded on Tuesday, reversing losses stemming from Samsung Electronics Vice Chairman Jay Y. Lee’s receiving a two-and-a-half year prison term on Monday.
Analysts said the short-lived impact of Lee’s detention on share prices is similar to what happened the first time Lee was imprisoned in 2017, despite what may be more reactivity to news and rumours because of increased retail investor participation in the stock market.
But corporate governance experts fear Lee’s pledge to make compliance a top priority may lose steam, especially because it is no longer a part of his case for leniency.
Lee entered a detention centre on Monday after the Seoul High Court sentenced him to prison for bribing an associate of former President Park Geun-hye and other charges. Because he has already served one year in prison, he will serve 18 more months.
In his final statement to the court in December, Lee pledged a “new Samsung”, including guaranteeing labour union activities and not handing over management rights to his children at the family-controlled conglomerate.
Moreover, he promised “stricter compliance and transparent operation” of the so-called Business Support Task Force, a team in Samsung Electronics, some of whose executives a Seoul court found guilty of destroying evidence about an affiliate’s accounting practices, said to be aimed at helping boost Lee’s control of the tech giant.
“I will transform my mind and stance and create a thorough compliance system that can resist undue pressure,” Lee said.
‘CHALLENGING THE OWNER FAMILY’
An independent compliance committee, set up last year after the Seoul High Court began proceedings, said it would continue meeting with CEOs and making recommendations despite being dismissed by the court on Monday as ineffective. Read More