[Interview file] One week of Lee Jae-yong's fate... What is the meaning of the last question the judge asked?

Samsung Electronics Vice Chairman Lee Jae-yong's sentence of repatriation for the destruction of the Gukjeong Nongdan is approaching a week ahead.

The Criminal Section 1 of the Seoul High Court, which announced that it would only receive additional opinions for about a week after the resolution hearing on December 30, has now started writing the judgment.

It would not be an exaggeration to say that this week, when the judges will determine the final legal judgment and the basis for it, is'one week of fate' for Vice Chairman Lee Jae-yong.

Despite the controversy over the need for more time to evaluate the effectiveness of the'Samsung Compliance Monitoring Committee' to determine whether or not to restrain Vice Chairman Lee Jae-yong, the judiciary finally decided to sentence it in January, before the judge's personnel.

On the 21st of last month, the judiciary expressed this meaning and issued an order to both Samsung and the special prosecutors to answer the questions of the judiciary.

It was the last order to prepare for the appointment of this trial, which has been held for over a year.

Just as there is a saying that'there is an answer in the question', this order to prepare for the Seok-myeong gives a glimpse into the thoughts of the judge who reached the end.

In this report file, which is the last report before the election of Vice Chairman Lee Jae-yong, I will give a more detailed report on the request for clarification by the court and the responses of both Samsung and the special prosecutor.

This is because this trial, which marks the end of the'Gukjeong Nongdan Case', which will be published in modern Korean history textbooks decades later, requires not only the results but also the process to be recorded in detail.

order for preparation for clarification of the 21st of last month by the court was'type of

It starts with the keyword.

The Ministry of Justice presents 8 pages of the report of the Professional Hearing Committee dated December 14, 2020 at the beginning, and it is pointed out that all three of the Professional Hearing Committees who evaluated the Samsung Compliance Monitoring Committee selected'type of possible misconduct' as a key evaluation factor. Reminded me.

The judiciary was followed by excerpts of the evaluations of members Kang Il-won (recommended professional judge of the judiciary), Hong Soon-tak (special prosecutor-recommended expert judge), and Kim Kyung-soo (Samsung nominated expert judge).

Former Constitutional Judge Kang Il-won's evaluation contents excerpted by the court are largely twofold.

▲The Samsung Compliance Monitoring Committee said,

and ▲’BCG is conducting consulting work on a sustainable compliance management system. It was a part that defined possible risks in the future and that compliance monitoring activities will be strengthened

.

In the evaluation report of former Judge Kang Il-won, the point that'the Samsung Compliance Monitoring Committee has not reached the tangible form of possible illegal acts' was presented.

Accountant Hong Soon-Tak's evaluation, excerpted by the court, was similar.

In the report of accountant Hong Soon-Tak,

of

and

He mentioned the

.

On the other hand, the contents of the evaluation of former high prosecutor Kim Gyeong-soo, excerpted by the judiciary, are

.

The Judiciary then presents several additional texts.

<Compliance Control Standards for Listed Companies> jointly established by the Ministry of Justice and the Korea Listed Companies Council, thesis by Professor Se-hwa Park of Chungnam National University Law School <Compliance Management of Listed Companies and Rational and Efficient Compliance Control Standards>, and thesis <Compliance Control under Commercial Law> Review on practical issues related to the program and legislative improvement plans> etc.

All of the texts excerpted from the order for preparation for clarification by the court refer to'types of possible risks' as the core of an effective compliance system.

<Standard Compliance Control Criteria for Listed Companies>

Article 12 (Evaluation of legal risk)

(…)

② Compliance officers review the size and frequency of legal risks to determine the possibility of violations, and take

(…)

Thesis <Compliance Management of Listed Companies and Rational and Efficient Compliance Control Criteria> 中

(…) The compliance officer's control activities begin with the evaluation and management of legal risks.

It is important for companies to evaluate the type, size, and frequency of occurrence of legal risks through various verifications and data analysis for all business sectors, and to categorize

by department, employee or regulatory agency

Thesis <Consideration on practical issues and legislative improvement plans for compliance control programs under commercial law> 中

(…) Regardless of which method is used, the size and frequency of legal risks are reviewed to determine the possibility of occurrence and

In addition, the Court provides some of the US federal sentencing standards referenced in this trial.

The U.S. federal sentencing standard also holds a'periodic risk assessment' as a criterion for evaluating the effectiveness of the compliance program, and for this purpose,'setting priorities to respond to the most serious and most likely misconduct', that is, a kind of risk. They are seeing the need for typing.

In summarizing the various texts presented in this order,

it can be read that the

court considers'types of

.

The recommendation for special investigation and special investigation committee specialize in psychological hongsuntak accountants

has claimed.

On the other hand, Samsung insists that work related to the classification of legal risks has been commissioned by BCG, a global consulting firm.

In his report, former Chief Prosecutor Kim Gyeong-soo, a member of Samsung's expert hearing committee, said,'It is correct to classify risks that occurred in the past and manage them strictly, and to categorize risks that may occur in the future from those with high probability.'

.

judges come up with a rather long premise and ask questions.

The following eight cases were listed in which the family of the head of Samsung was punished or prosecuted for misconduct, and were asked to assess the legal risk and explain whether measures were in place to prevent recurrence.

<The fact of the charges of the family of the

chief executive

officer of Samsung for an explanation>

① The case of

negligence

related to the issuance of low-priced bonds with the right to underwrite new shares of Samsung SDS

② The case of bribing the former President Chun Doo-hwan

③ The

case

of giving a bribe to the former President Roh Tae-woo

④ The

case of the

former President Kim Dae-jung's son, Kim Hong-up Case of providing activity expenses

⑤

Case of

bribery in connection with payment of fees to former President Lee Myung-bak

⑥

Case of

embezzlement of Samsung C&T executives and staff

members in the name of

construction cost for the family housing of Chairman Lee Kun-hee

⑦ Case of tax evasion due to the use of Samsung Group executives' second-name securities accounts

⑧ Evidence of employees of the Project Support Task Force destroy event

gangsanguk senior judge in charge of the referees of this event in the last month, 21 days trial has also answer questions so the Samsung lawyer.

▷Samsung's attorney: Can we understand the details of the judgment of the judiciary as seeking clarification whether these risks can be controlled under the current new compliance system?

▶ Senior Judge Kang Sang-wook: No, please do not change the question.

Do what you ask.

So I gave the standards in detail, and I'm also curious.

Although they requested consulting from BCG, the Samsung Compliance Committee's'type of possible legal risks' did not take place until the end of the trial.

The judiciary requested a more detailed explanation of whether the evaluation and countermeasures were made even for the illegal activities of the Samsung family members in the past.

Samsung's opinion on this was explained in the opinion that it submitted on the 24th of last month to the effect that'the past misconduct has been evaluated and prepared, and some types of past illegal acts are difficult to recur in the current situation.'

Specifically, ① with regard to <Samsung SDS's negligence case related to the issuance of low-cost bonds with underwriting rights>,'Samsung Compliance Committee requested the submission of data when there is a transaction with a related party, and a device was prepared to present an opinion to the board of directors.' Said.

In case of bribery payment to a former president or children of a former president ② ③ ④, the ERP (Enterprise Resource Planning) system and IFRS International Accounting Standards were introduced, and the Financial Information Analysis Institute (FIU) was installed under the Financial Services Commission. Explained that it is difficult to raise explicit slush funds.

⑤ Regarding the bribery in the form of a legal service contract, such as <the bribery case related to payment of fees to former President Lee Myung-bak>, it is explained that'the deliberation process for external sponsorships was strengthened and the approval details of the sponsorship were notified to the Compliance Committee afterwards'. In the case of ⑥<Samsung C&T's employee's embezzlement in the name of the construction cost of the family house of Chairman Lee Kun-hee>, he explained that such transactions between affiliates and the total family were also included in the monitoring target of the Compliance Committee.

Samsung also explained that the issue of sub-named stocks was resolved by a Samsung special prosecution in 2008, and the same thing as the case ⑦ could not happen. A countermeasure was suggested that the overall compliance culture was improved.

brought

special prosecutor submitted a refuted opinion to the court.

He said it was the first time Samsung's allegations that it had prepared legal risk assessments and countermeasures to prevent recurrence of past crimes listed by the courts were heard, and attacked that it was less reliable.

Even if Samsung's claim is true, he insisted that simply elaborating the compliance system at the subsidiary level could not prevent crimes from the head of the family.

As can be seen from the eight crime charges listed by the court, it is said that no matter how much Samsung has prepared each time, the criminal acts of the head family have been repeated.

In the end, he emphasized that the important thing is not to monitor compliance at the level of subsidiaries, but to understand the actual status of the system in which orders from the general manager are delivered and reported, and to create a compliance system to respond to them.

The special prosecutor's point of view is that Samsung has long mentioned preventive measures for individual crimes, but there is no evaluation of the control tower such as the'Future Strategy Room', so it is just a steamed bun.

In the end, the special prosecution can be seen as a intensive attack on the fact that until now, Samsung has not categorized'potential misconduct' and neglected the evaluation and preparation of countermeasures related to the'total order system' for illegal acts in the past.

In this case, the court announced that it would use the'Compliance Monitoring Committee' as a sentencing factor, and stated that it is necessary to have an effective compliance monitoring system that can be feared by the total number of people in order to be considered advantageous for the sentence. The special prosecutor aimed to reach the end of the trial on the point that'there is not a system that the generals would fear.'

21st of last month, when the battle was going to decide whether or not to decide on a trial as it is, Bok-Hyun Lee, the chief prosecutor, dispatched a special prosecutor in charge of a'strong protest', raised his voice to the judge.

Bok-Hyun Lee: Deputy Prosecutor Lee Bok-Hyun: I tell you to submit data and thesis in the clarifications of the court, and refer to the judgment on page 12, but it takes at least a week to prepare the lawyer and we have to hear our opinions.

Then Judge Jung Jun-young answered.

Judge Jung Joon-young: I have pointed out several times last time, but please refrain from the special prosecutor's side of saying words that the court did not mention.

Why does the word probation keep coming out?

Would you like to seek probation when the special prosecutor asks for it?

He keeps saying unnecessary things. The judge didn't mention it.

Prosecutor Bok-hyun Lee, who raised his voice, stopped protesting, and Special Prosecutor Yang Jae-sik also refrained from prosecutor Lee.

It was a moment when the attention of both the Special Prosecutors and Samsung focused on the comment of'Don't rush to conclusions with the suspension of execution', who had been criticized for'Samsung Compliance Monitoring Committee's proposal is not a stone for the sentence of probation Lee Jae-yong'.

Deputy Judge Jung Joon-young also said at the end of the trial:

Deputy Judge Jung Joon-young: In this case, it is necessary to punish those who commit bribery and embezzlement, which the defendants are also convicted of, and

(…) Whether Samsung’s new compliance committee proposed by the defendants is considered effective and sustainable, whether it will be considered as a condition of sentencing, and if so, to what extent it will be considered.

(…) I hope the defendants prepare for the final defense with the attitude that our court will take responsibility for any outcome of the trial and humbly accept it, as stated in the first trial of the revocation and return trial.

It may be seen as the judge's usual request to accept modestly whatever outcome of the trial, but it is a point that emphasizes once again that the Samsung Compliance Committee will thoroughly evaluate the effectiveness.

As a reporter, watching the trial in this case, which can be said to be the end of the sentence of the Gukjeong Nongdan case, I once argued that it would take more time to evaluate the effectiveness of the Samsung Compliance Monitoring Committee.

(Link to report file: ▶ [Report file] Evaluation of the Samsung Compliance

Committee,

can it be completed within this year?)

However, instead of taking additional time, the court decided to issue a sentence within the term of the current court member.

One of the chief judges also commented, "It is a kind of abandonment of duty by the judge to postpone the deadline. When the moment of decision comes, the judge must make a decision based on what has been given."

After all, what matters will be the logical perfection of the grounds for judgment that the judge will present to the world.

As can be seen in the final order of preparation for the judgment of the court, the final judgment on the crime of collusion between the president and global corporations will continue to be spoken and evaluated after 10 or 20 years.

(Photo = Yonhap News)