Samsung Electronics is currently in the process of changing its internal donation policies and rules following the arrest of Samsung Group’s Vice Chairman and heir Jay Y. Lee. On Friday, the largest business conglomerate in South Korea revealed that its Board of Directors (BoD) will now be required to directly vote on any potential donations to parties not related to Samsung that are valued at over one billion won, i.e. approximately $886,000. The decision is directly related to the fact that Lee was arrested after it came to light that he donated over $37 million to two organizations that have previously backed policy initiatives of the Korean President Park and were connected to Park’s associate Choi Soon-sil who’s currently in jail and awaiting trial in the same case that put Lee under arrest.
Samsung’s new donation policy is radically different to the old one that only required the company’s BoD to vote on donations that are valued at over 680 billion won, or approximately $602 million. As the company was rarely even considering such donations, the former policy had little effect in practice. The Seoul-based business conglomerate issued a statement that says how this move will improve the transparency pertaining to Samsung’s operations. Furthermore, two top executives of Samsung Group reportedly offered their resignations following latest developments, Reuters reports. It’s unclear whether the company’s BoD accepted their resignations, but it seems that the corruption scandal Samsung is currently in the center of will have more serious consequences for the company.
Lee previously claimed that he was forced to make payments to organizations connected to Choi and Park and vowed to avoid suspicious business practices in the future. However, the South Korean special prosecutor’s office was still adamant to pursue charges against one of the most powerful businessmen in the Far Eastern country. Following that turn of events, Lee is currently facing formal accusations of bribery, embezzlement, perjury, hiding the proceeds of a criminal act, and concealing assets overseas. Industry analysts believe that Lee’s temporary absence won’t have a huge effect on Samsung’s operations, but the company’s prospects may change if its heir and Vice Chairman is convicted to several years in prison.