Deputy Judge Jung Joon-young: Samsung’s new compliance system submitted by the lawyer today.
This is the core of the corporate crime sentencing standards and is the reason for the sentencing referred to in Chapter 8 of the US federal sentencing standards established in 1991.
According to this, the compliance monitoring system should be effectively operated.
(...) However, such a system can only be considered as a condition of sentencing only if it is practically and effectively operated.
-January 17, 2020 Lee Jae-yong's 4th hearing
Judge Jung Joon-young of the 1st Criminal Division of the Seoul High Court, who sent Samsung Electronics Vice Chairman Lee Jae-yong back to jail yesterday (18th), first expressed his intention to consider the Compliance Committee launched by Samsung as a sentence of sentence exactly one year and two days ago. I hit it.
The words of the judge, which were absurdly accepted by special prosecutors and liberal civic groups, were an opportunity from heaven to vice chairman Lee Jae-yong.
From this day on, the story of a'probation of execution' in the heart of the judiciary was solidified like a normal rule.
Protests by liberal civic groups took place every day around the court, and the special prosecution filed two applications for evasion of the court because it was difficult to expect results other than probation at the court.
However, the court sentenced Vice Chairman Lee Jae-yong of two years of imprisonment yesterday, which is the minimum of the sentence stipulated by law, but did not give him a probation.
The judges wrote in detail the reason why Vice Chairman Lee Jae-yong had to be sent back to prison.
●
Signs that the court was negatively evaluating the effectiveness of the'Effective Compliance Committee
', Samsung
Vice Chairman Lee Jae-yong, who
did not even lock the first button, and the
effectiveness of the Samsung Compliance Monitoring Committee were detected in earnest from the end of the trial at the end of last year.
▶ [2021.01.11 Report File] A week of Lee Jae-yong's fate…
What is the meaning of the last question the judge asked?
The Ministry of Justice has presented a variety of documents and has emphasized that the core of the effectiveness of the Samsung Compliance Monitoring Committee is'types of possible legal risks'.
The importance of this'type of legal risk' appears repeatedly in the literature that the court has referenced and referred to during the trial period for more than a year, such as <Compliance Monitoring and Control Standards for Listed Companies>.
The judiciary also revealed that the'type of legal risk' was the'first button' of the compliance committee's effectiveness evaluation.
Effective compliance monitoring begins with an assessment of legal risk.
According to the standard compliance control standards for listed companies, in order to ensure effective compliance, ① assess the legal risk by reviewing the size and frequency of legal risk, judging the possibility of violation, and categorizing major legal risk actions. Next (Article 12) ...
-Vice Chairman Lee Jae-yong in the judgment on the revocation and repatriation
However, Samsung did not complete the core task of this'first button' until the sentence was sentenced.
Instead, Samsung replied,'We commissioned BCG, a global consulting firm, to qualify risk, and the results will come out next year'.
Even though it has been more than 10 months since the start of the activities in earnest, it seems difficult for the judiciary to understand that the Samsung Compliance Monitoring Committee did not directly do the work that is the core of the effectiveness evaluation and outsourced it, and that the results will only come out next year.
If, as Samsung's assertion, Vice Chairman Lee Jae-yong was a matter that had a profound impact on Samsung's management as well as the national economy, it should have worked differently.
● Even the'rest of study' given by the judges…
It seems that the judiciary tried to give a chance to Samsung, who didn't even lock the first button.
On December 21, last year, in the last preparatory order for clarification, the court asked for the purpose of'if the legal risk that will occur in the future cannot be categorized, explain what measures have been taken to prevent the recurrence of the violation that occurred in the past'.
Samsung has submitted several responses to this.
However, when I obtained this answer and read it, it was difficult to understand even as a reporter.
The court asked for measures to prevent recurrence, citing a crime in which Samsung Electronics executives and employees held the borrowed shares of Chairman Lee Kun-hee in the past.
However, Samsung responded with the intention that'it is difficult to recur because there is no current stock name.
To the question,'How can I prevent these things from happening in the past?', I replied,'It is an issue that has already been over in the past.'
The court struck Samsung's answer in the ruling.
Since the legal risk to be managed is not limited to the existing legal risk, the holding of borrowed shares mobilized by executives and employees should also be viewed as a legal risk to be managed.
(...) However, the
attorney is insisting that there is no current nominated stock, which should be considered in the process of prioritizing by evaluating the likelihood of occurrence of risk.
-Vice Chairman Lee Jae-yong in the judgment on the revocation and repatriation
In the case of the suspected illegal merger between Samsung C&T and Cheil Industries, which is about to be tried, Samsung has always insisted that it is not the subject of investigation by the Compliance Committee because there is no first trial decision.
The court, which has been emphasizing'crime prevention' throughout the trial process, also said in the ruling that this claim is also difficult to understand.
The part where the Samsung C&T and Cheil Industries merger case has not been investigated is not convincing because
it
is a matter before its inauguration or that the court's first trial decision has not yet been declared
.
The nature of compliance monitoring is prevention, not sanctions
, and analyzing the company's history
in compliance monitoring
is one
of the essential
tasks
in analyzing legal risks expected to occur in the future and preparing countermeasures.
Because it is.
-Vice Chairman Lee Jae-yong in the judgment on the revocation and repatriation
The judges handed over the homework, and Samsung either did not do it properly or sometimes made different arguments on the subject of the homework.
Samsung was unable to make use of all of these opportunities, which had been given several opportunities despite the special prosecutors and civic groups accusing him of'giving too many opportunities to make a judicial decision'.
● Amnesty already raising my head…
Yesterday, when Vice Chairman Lee Jae-yong was re-
imprisoned
, a petition for the Blue House came up asking him to pardon Lee as a special envoy in Section 3.1 before
finishing the'unfinished homework'
.
Business groups issued statements one after another saying,'We are concerned about Samsung's management gap and the damage to the national economy.'
In line with the recent issue of amnesty for former presidents, Vice Chairman Lee Jae-yong's amnesty is likely to be talked about every major national holiday coming back.
But before that, we have to see if Samsung finishes the unfinished homework.
We must keep looking to see if Samsung continues to maintain and develop the Compliance Committee, which was allocated a huge budget and organization, as it was at the time of its inauguration.
In this regard, the judiciary wrote in the ruling that five factors should be supplemented, such as ▲preparation of countermeasures against illegal activities through group control towers such as the Future Strategy Office ▲preparation of countermeasures to prevent illegal activities of other affiliates other than the 7 affiliates currently joined to the Compliance Committee. .
Samsung, reborn as a global company, showed off its image in the last trial that took the lead.
Is it because the group heads settled with the practice of being probated, or the defense strategy was not sufficiently discussed in the head-centered imperial communication structure, and Samsung's answers to the questions of the court and special prosecutors were ``delicate. 'Instead,'comfort' was read, unable to read the changed situation.
This uneasiness exposed in the face of compliance management challenges should not return to Samsung and to our economy again like a boomerang.
Sulik is not a theory of sympathy or amnesty, but that is why it is necessary to continuously monitor and criticize the new Samsung Compliance Monitoring System.
(Photo = Yonhap News)