An Act
of Atonement
Samsung Group, Chairman Lee and Family
decide to donate 800 billion won

Samsung Group, Chairman Lee Kun-hee and his family have decided to make a cash donation of 800 billion won free of strings to society, Lee Hak-soo, vice chairman of the group in charge of the business group's restructuring headquarters said February 7.
The high-ranking Samsung executive said the donation and other related moves by the largest conglomerate in the country are intended to placate public concern for the group's unjustifiable activities including the formation and distribution of slush funds, the illicit transfer of convertible bonds of Everland and "X-File"case which involved the group's top leaders. He apologized for the group's aggressive moves, which led to the criticism that the group is a "Samsung Republic"and above the law.
The vice chairman also said the conglomerate will also drop all its legal proceedings against the government, including the suit against the Financial Industry System Restructuring Law, which is up for revision by the National Assembly. The group brought a suit against the government, claiming that the law when revised would make all of its affiliates including Samsung Electronics an easy target of hostile takeover attempts by corporate vultures. "The group will now follow the law when it is amended as proposed by the government by the parliament,"he said.
The Samsung official said Chairman Lee and management have decided to make the move to accept the people's understanding on various issues facing them as pointed out by the people and various civil activist groups including the People's Solidarity for Participatory Democracy and in regretting their past wrong practices. In addition to the donation, the group will drop its suit submitted to the Constitutional Court in connection with the Fair Trade Law, its legal suit related to the withdrawal of penal taxes assessed on gift taxes levied on Samsung SDS bonds with warrant, the expansion of the group's social service, the formation of a "gathering to keep watch on Samsung"and give more management freedom to the group affiliates.
The Samsung executive said the decision to make the donation, the largest private gift in history, has been made as form of an apology for a social uproar following the gift made with Everland corporate bonds to the children of Chairman Lee.
He said 450 billion won will come from the scholarship foundation created by Chairman Lee's family and Samsung affiliates, 220 billion won from the family including the property left by a daughter of the chairman who died last year and 130 billion won, the increased amount of value of Everland bonds given to the chairman's son. The government will decide who will manage the fund in consultation with civil activist groups.
The conglomerate expects that its move made without and guidelines would alleviate the anti-Samsung sentiments created with the inheritance of management rights free of taxes by calming down heated discussions. On dropping the two law suits, the Samsung official said Samsung thought that it is more important for the group to answer the people's expectations and what they mean as a representative business group in the country rather than continuing to argue the legality of government actions. He said the group has yet to draw up its defensive strategy against possible hostile takeover attempts by corporate vultures, although it has decided to drop its suit against the government move to revise the Financial Industry System Restructuring Law and accept it when it passes the parliament.
Vice Chairman Lee said the group has also decided to expand its social welfare activities by increasing the social welfare fund, which totaled 480 billion won last year by 100 billion won annually from this year to be for such causes as the construction of baby care centers around the country, assistance to the farm and fishery villages and destitute youths. The move will double the amount of annual social welfare expenditure from 100 billion won to 200 billion won. The number of officers and staff at the restructuring headquarters will be reduced to 100 from 150, along with increasing the number of outside directors at financial affiliates to more than half. He said the group has also decided to provide jobs to more than 20,000 college grads this year and its facility investment would total around 21.3 trillion won. The group now has 150,000 employees. Its exports are projected to total $70 billion, up $10 billion from last year. nw

Samsung Group Chairman Lee Kun-hee.