Seoul, Jan 19: Five current and former executives at Samsung, South Korea's largest conglomerate, have paid its electronics subsidiary a total of 20 billion won (USD 16.9 million) in damages for mismanaging business affairs, a company spokesman said today. Samsung Group's chairman, Lee Kun-Hee, paid 7 billion won (USD 5.9 million) to Samsung Electronics Co., while four former and incumbent executives paid the remainder, the spokesman said on condition of anonymity.
The payments stem from a landmark court ruling in favor of minority shareholders who sued the electronics giant in 1998, accusing it of illegal internal trading that caused losses and hurt the unit's share price.
The ruling in 2001 was the first to find South Korean business executives legally responsible for mismanagement. It also marked a victory for civic groups, which had fought to end widespread illegal practices among family-controlled conglomerates, or Chaebol, such as cross-funding and internal trading.
The court originally ordered the executives to pay 97.7 billion won (USD 82.8 million) in damages, but that figure was reduced on appeal. The payments began in December and were concluded earlier this month.
Among the four other executives involved were Choi do-Seok, the current president of Samsung Electronics, and Daeje Chin, now the Minister of Information and Communications.
Bureau Report