Samsung has been publicly forced to get its act together to stamp out corruption, with the South Korean government choosing to make an example of it.
According to a top industry consultant familiar with the company, Samsung’s legal “philanderings” are no secret. While other companies are also at it, the South Korean government is keeping them safe as it looks to drive revenue and reputation to the country.
The comments come as news of shadiness inside Samsung spreads, after an inspection found that elements of the company were involved in corruption.
The findings led to CEO Oh Chang-Suk stepping down and Lee Kun-Hee, chairman of the company, claiming there would be some managerial changes.
However, he would not specify what the investigation had uncovered – only saying that it included taking bribes and enjoying hospitality from suppliers. He said the “worst type” of abuse was pressure on junior staff to commit corrupt acts.
“Corruption and fraud” at Samsung Techwin came about accidentally, and was a result of a “complacent attitude during the past decade”, he told reporters
This isn’t the first time Samsung has been alleged to have its hands in the till. In 2007 the company’s former executives accused it of bribing police and politicians to stop probes into its management, while in 2009 the chairman, along with nine other senior executives, were indicted on tax dodging charges.
According to our analyst, speaking under condition of anonymity, these are well known facts.
“Let’s be honest, Samsung’s philanderings are not a secret, the company has been at it for years,” he said.
“However, now it’s more of a ‘big deal’ because the South Korean government is trying to tighten these things up and drive revenue.
“Yes, companies over there are huge in different countries, but with more competition coming into this market from other countries, we as consumers, and suppliers are able to choose which company we buy from.”
He pointed out that Samsung already has a reputation for price fixing TVs and the only reason why it hadn’t seen a decline in business was because a host of companies including AUO, LG, and Panasonic were found to be doing the same. As we reported here.
“Therefore this was more a case of live and let live rather than turn our backs on this one company,” he said.
“When it comes to other companies, it’s hard to pin point which ones are in Samsung’s corrupt boat, but I will say that we have seen evidence of wrong doings in a range of different companies.
“The majority have been found to be doing similar to Samsung but it’s all been hushed up by the government for the reasons I outlined before. in fact it could be fair to say that Samsung is being made the example with the others hiding behind their government bodyguards.”
As far as disgruntled employee whistleblowers speaking up, Samsung and their ilk are well and truly covered.
“These companies are huge and rake in small fortunes, a “donation” to the family, or “bonus” is therefore enough to keep an employee happy.
“Plus there’s the ever looming threat of the government.”