SEOUL, Nov. 28 (Korea Bizwire) – Samsung chairman Lee Kun-hee’s position as the largest stakeholder of Samsung Life Insurance is in jeopardy after speculation over the existence of a secret offshore account was corroborated in a National Policy Committee meeting held on November 27.
Politician Park Chan-dae said, “Chairman Lee’s eligibility as the largest stakeholder in a financial services firm has run into legal problems.”
According to Park, Lee self-disclosed his secret offshore account and admitted that he had violated the Punishment of Tax Evaders Act and the Foreign Exchange Transactions Act. The Act on Corporate Governance of Financial Companies (ACGFC) forbids individuals who have infringed on these laws from being the largest shareholder of a financial services firm.
Article 32 of the ACGFC requires the largest investor among major stockholders of a financial services firm to pass a series of tests, some of them to check for possible infractions of tax law.
Choi Jong-gu, head of the Financial Services Commission, said during the National Policy Committee meeting that “there appears to be a possibility of that happening” regarding Lee being stripped of his position.
If Lee’s unpaid taxes amount to more than 1 billion won annually, he may face up to five years in prison. Even after taking into consideration the fact that he self-disclosed his assets, it appears difficult for Lee to avoid at minimum a one-year prison sentence.
Furthermore, Lee will possibly see his ownership rights capped at 10 percent of his stock in Samsung Life Insurance. Data from the Financial Supervisory Service indicates that Lee currently holds a 20.76 percent share. In this scenario, Lee would be permitted to exercise ownership rights equal to 10 percent of his stake only.
This is not the first mention of the Samsung leader’s offshore account. During a National Assembly inspection hearing on October 19, it was revealed that deputy prime minister Kim Dong-yeon “had heard [report(s)] about that”.
Kim added that the documents in question were classified, and he did not know anything more beyond that.
Kim’s answers were in response to questions raised as to whether Lee had come clean on his offshore account during the “legalize the underground economy” mandated period by the previous administration and taking place throughout deputy prime minister Choi Kyeong-hwan’s time in office.