Samsung closes its group strategy office following probe into graft scandal

Written by on February 6, 2017 in News with 0 Comments

REUTERS/Ahn Young-joon/Pool

SEOUL (Reuters) – Samsung Group said it will disband its corporate strategy office after a special prosecution probe ends, setting a timeline on a pledge to wind up the office that has been criticized for its role in a national graft scandal.

The smartphones-to-biopharmaceuticals business empire is currently being investigated by the South Korean special prosecutor’s office as part of a wider probe into the scandal that threatens to permanently unseat President Park Geun-hye.

Special prosecution has classified Jay Y. Lee, third-generation leader of South Korea’s top conglomerate, and head of the corporate strategy office Choi Gee-sung as suspects in its bribery investigation on suspicions that Samsung paid money to organizations linked to Park’s confidant, Choi Soon-sil, to pave the way for a 2015 merger of two affiliates.

Samsung’s corporate strategy office has come under scrutiny amid suspicions that its top officials, tasked with setting the group’s long-term agenda such as an ongoing ownership restructuring, were involved in the lobbying process. The office is seen as a key organ through which the founding Lee family exerts control over various affiliates.

“Action will be taken following the conclusion of the special prosecutor’s investigation,” Samsung said in a brief statement, adding that preparations are already underway.

It did not elaborate on details including how the conglomerate plans to perform the functions that are currently performed by the strategy office.

Lee, who assumed leadership of Samsung after his father Lee Kun-hee was incapacitated by a May 2014 heart attack, said at a December parliament hearing over the graft scandal that he plans to disband the office but did not give a specific timeline.

The special prosecution’s investigation is currently set to conclude by Feb. 28 but the office said separately on Monday it is considering seeking a 30-day extension.

(Reporting by Se Young Lee; Editing by Muralikumar Anantharaman)

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