Samsung chief resigns under cloud of scandal

Samsung Group Chairman Lee Kun-hee, indicted last week on tax evasion and other charges, said today that he would step down from his post at the top of South Korea’s biggest conglomerate.

“I have decided to resign from the post of chairman,” Lee said in a nationally broadcast news conference less than one week after he was indicted after a special independent counsel’s investigation into Samsung’s operations.

“We, including myself, have caused troubles to the nation with the special probe,” Lee said. “I deeply apologize for that, and I’ll take full responsibility for everything, both legally and morally.”

After Lee spoke, Vice Chairman Lee Hak-soo, considered the chairman’s closest confidant, announced his own resignation, as well as that of Lee Jae-yong, the chairman’s son and heir and an executive at Samsung Electronics Co.

In addition, chief executives of two major financial units at Samsung will step down, the company said, naming Hwang Tae-seon, who leads Samsung Fire & Marine, and Bae Ho-won, CEO of brokerage Samsung Securities.

There was no word on who would replace the chairman.

Special prosecutors Thursday indicted Lee on charges of evading $113 million in taxes, ending a three-month probe into the family-run conglomerate that began with allegations of wrongdoing by a former Samsung lawyer. The prosecutors said Lee and other top executives conspired to hide $4.54 billion in Lee’s assets and worked secretly to transfer wealth to Lee’s children.

Prosecutors, however, dismissed the most explosive claim -- that Samsung used affiliates to raise a slush fund to bribe influential South Koreans -- for lack of evidence.

They also decided to indict Lee, 66, without arrest, saying his apprehension was too big a risk for South Korea, citing “the extremely competitive global economic situation.” Arresting Lee, they said, would “cause enormous disruptions” in Samsung corporate management and have “negative repercussions on our economy.”

Samsung Group, founded 70 years ago by Lee’s father, has interests in dozens of businesses including electronics, shipbuilding and construction. Its companies account for as much as 20% of South Korea’s exports, by some estimates.

Samsung Electronics, its flagship corporation, is a world leader in computer chips, flat-screen TVs and mobile phones.

Lee, widely seen as the driving force behind the rise of Samsung Electronics into a global technology force, hinted earlier this month that he might resign over the scandal after questioning by the special prosecutors.

Besides Lee, nine other Samsung executives were indicted.