Tag: corruption

Samsung trial opens

The trial of Samsung’s supreme dalek on bribery, embezzlement and other offences in a corruption scan has opened in South Korea.

Jay Y. Lee, denies all charges against him which are connected to the impeachment of President Park Geun-hye.

Lee, who is being detained at Seoul Detention Centre, did not attend court. A defendant does not have to turn up during a preparatory hearing, held to organize evidence and set dates for witness testimony.

Lee’s defence said that the special prosecution’s indictment cites conversations, evidence or witnesses the prosecution did not actually hear, investigate or interview according to the rules – or state opinions that are not facts.

Song Wu-cheol, defending Lee, told the court that it was unclear what kind of order Lee is supposed to have given.

“The indictment cannot have statements that can create prejudices in the court about the case,” Song told reporters as he left court.

The Samsung Group has repeatedly denied wrongdoing.

Among the charges against Lee, 48, are pledging bribes to a company and organisations linked to a friend of President Park, Choi Soon-sil, the woman at the centre of the scandal, to cement his control of the smartphones-to-biopharmaceuticals business empire.

Defendants being tried with Lee include the former Samsung Group Vice Chairman Choi Gee-sung, former Samsung Group President Chang Choong-ki and former Samsung Electronics President Park Sang-jin. They are also denying everything.

Legislation appointing the special prosecutor states that the current lower court trial should be finished within three months of the indictment on February 28.


South Korea mulls giving Samsung boss a get out of jail free card

monopoly (1)While most countries would have no problem locking a businessman up if they think he has committed a crime, South Korea has to factor in the economic impact the arrest will cause.

South Korea’s special prosecutor said it will take into account the economic impact of whether to arrest Samsung boss Jay Lee in connection with an influence-peddling investigation involving the president.

The office also delayed its decision until later today on whether to seek the arrest of Lee, the third-generation leader of South Korea’s largest conglomerate, or chaebol, citing the gravity of the case.

Spokesman Lee Kyu-chul told reporters on Sunday investigators were deliberating all factors including the potential economic impact of the arrest of Jay Y. Lee.

Samsung appears to have provided $25.46 million to a business and foundations backed by President Park Geun-hye’s friend, Choi Soon-sil, in exchange for the national pension fund’s support for a 2015 merger of two Samsung affiliates.

The Samsung chief denied bribery accusations during a parliamentary hearing in December.

Effectively if the coppers factor in the economic effect then Jay Lee could be given a get out of jail free card.

Park, the daughter of a military ruler, has denied wrongdoing, although she has said sorry for exercising poor judgment. Her friend, Choi, who is in detention and facing her own trial, has also denied wrongdoing.

The whole thing must feel particularly unpleasant for those who see the rule of law as sacrosanct. The chiefs of South Korean chaebol have over the years had prison sentences shortened or forgiven, or received pardons, with the economic impact of imprisonment cited as a factor.

Jay Lee’s dad Lee Kun-hee was handed a three-year suspended jail sentence in 2009 for tax evasion. He was later pardoned.

It seems that if you have a lot of money and run a business in South Korea you can do what you like.

4G gets the works except the Turks

istanbul-2The only former world empire to be named after a piece of furniture has decided to give 4G technology a miss.

The once “sick man of Europe” Turkey is debating cancelling a May tender for 4G telecoms infrastructure and moving to 5G instead.

President Tayyip Erdogan urged the country not to “lose time” with the technology and move straight to 5G.

Erdogan last week called for a move to fifth-generation mobile networks, within two years, skipping the current 4G technology.

However more cynical observers say that this is Erdogan trying to put positive spin on a disastrous tender process. The process was supposed to finish in May and if it is like any other big Turkish contract it will be full of stories of bribery, corruption and inefficiency. If something has gone wrong then axing the 4G move might bury a scandal before it is made public.

The Information and Communication Technologies Authority this month set a May 26 deadline for a 4G tender for 20 frequency segments at a minimum value of around $2.5 billion.

Officials have previously said 4G services would be offered from the start of 2016.

YouTube online again in Turkey

YouTube is online in Turkey again and may be allowed to show whistleblowing videos which embarrass the government.

Turkey’s top court declared a government ban on YouTube unconstitutional, and cited the Turkish constitution’s freedom of expression clause, which guarantees that “everyone has the right to express and disseminate his/her thoughts and opinions by speech, in writing or in pictures or through other media”.

The administration of Prime Minister Recep Tayyip Erdogan went after the site on March 27, after it was used to host a leaked audio recording of Turkish officials discussing security matters in Syria.

Erdogan’s ban on Twitter fell flat just two weeks after he imposed it on March 20, and while YouTube is once again accessible, Turkey’s Telecommunications Directorate (TIB) has refused to lift web restrictions.

When a lower court told the government to sling its hook, the government just ignored it. It is not clear if the government will ignore the Constitutional Court’s appellate decision.

TIB has so far insisted that it had no plans to unblock the site for as long as it contains “criminal content” which is anything that says that Erdogan and his party are involved in anything shady.

It seems that the TIB has blinked, probably because the election is over and if Turks saw anything about government corruption it was clear they did not give a monkey’s about it. After all Erdogan was re-elected. 

US Senate backs patent trolls

The corrupt US senate has decided that patent trolls have more money than ordinary people have and has dumped a law to legislate the crippling trade out of existence.

While patent trolls destroy industries like technology, the big players have huge investments in patents and are not in favour of reform. Lawyers make a killing out of the frivolous patent cases and the powerful drugs companies depend on them.

Therefore, a proposal to club patent trolls over the head is now on hold indefinitely after the chairman of the Senate Judiciary Committee, Patrick Leahy, a democrat shelved the idea.

The law had backing across the house but Leahy suddenly took it off the table after Senate Majority Leader Harry Reid – another democrat – intervened at the last minute.

The bill would have made it more difficult for patent holders to file frivolous lawsuits, adding new requirements that would force lawsuit losers to cover litigation costs for both sides and patent holders to state their accusations more explicitly.

According to the republicans, Reid was got at by the lobbyists who paid to have the law shelved.

This is the third time in three weeks the majority leader has blocked legislation with bipartisan support in the Senate, the laws backer Republican John Cornyn said.

“It’s disappointing the majority leader has allowed the demands of one special interest group to trump a bipartisan will in Congress and the overwhelming support of innovators and job creators.”

It looks like the lobby groups came from groups who make a killing from being patent trolls namely trial lawyers, universities, pharmaceutical companies and biotech companies.

The University of Vermont and a biotech coalition each sent letters to Leahy opposing the legislation.

“We believe the measures in the legislation … go far beyond what is necessary or desirable to combat abusive patent litigation, and would do serious damage to the patent system,” reads one of the letters. “Many of the provisions would have the effect of treating every patent holder as a patent troll.”

Leahy acknowledged there had been a sudden amount of pressure from the lobby groups in the hours before the deadline.

But Washington thinks it is more likely that passing the legislation out of committee would put greater pressure on Reid to bring it up for a floor vote, which would put the democratic leader at even more uncomfortable odds with the groups that wanted him to sink the bill.

In other words, the US will have to suffer from patent trolls because its senators are corporate lapdogs for those who want to use the system to cripple industry to make a quick buck.

Makes you really regret that revolution now doesn’t it?

UK hackers take down the Russian embassy

UK hackers, who do not like the idea of Prime Minister David Cameron trying to improve relations with the Russians, have taken out the website of the local embassy.

It is during the first visit by a British leader to Moscow since the 2006 killing in London of a Kremlin critic Alexander Litvinenko.

The UK was outraged when a dissident was murdered. Not only was the murder conducted on British soil, but radioactive polonium-210 was put into tea, which is just not cricket.

When the trail lead to Russia, the authorities appeared to be uncooperative, particularly when Inspector Knacker of the Yard said it wanted to finger the collar of Andrei Lugovoy, an ex-KGB bodyguard.

Relations between Russia and the UK were as sour as month old milk until Cameron came into power and wanted it all to be water under the bridge.

According to Reuters, the embassy said it had set up a “mirror” website (www.rusemborguk.ru) to meet the increased interest of the public and media for information before Cameron flies to Russia on Sunday.

But the website of the Russian Embassy in London (www.rusemb.org.uk) was brought down by a suspected DDoS (distributed denial of service) attack, the embassy said in a statement.

The website carries articles by Russian Foreign Minister Sergei Lavrov and by Alexander Yakovenko, Russia’s ambassador to London, on Cameron’s 24-hour visit. 

South Korea makes example of Samsung corruption

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.” 

Corruption is good for business

Capital-hungry entrepreneurs should look to regimes like Mugabe’s for 100 trillion trillion Zimbabwean dollars to kick-start businesses, according to the Journal of Management Studies, sort of.

The recently published study suggests that rampant corruption in countries the world over could be beneficial rather than harmful to would-be money makers. Who’d have thought it?

The journal doesn’t advise paying off militias in Khat and grenades to whack rivals. The idea is that adapting to areas where there is a dodgy despot on the take means your company’s in an excellent market position where you may be the leading competitor because you’re the only competitor.

Once you’ve done well in one corrupt country, you can make it anywhere, says the report. “Even where competitors fail on entry or dare not to tread.” Consider that next time you’re ferrying roubles into Moldova.

The study’s message is that working in a corrupt company helps develop organisational capabilities rather than illicit ones. That’s not slipping the local copper a bung and organising your way out of prison. Instead, understanding that there’s a neighborhood protection racket after a company’s swag helps get used to working in strange and alien environments.

The study says with corruption, in international investment, “the heterogeneous impact of government corruption on firm outcomes, is dependent not only on the power wielded by dishonest officials, but also influenced by firm characteristics, industry regulations, political structures and organisational culture,” so according to publishers at Wiley-Blackwell, corruption “can be a distasteful but manageable part of a company’s international investment environment.”

In layman terms, it seems to be saying there’s no reason not to make a buck out of a country just because it suffers from corruption here and there.

Microsoft red-faced over Russian scandal

Microsoft is embarrassed that its anti-piracy agents in Russia have been linked to  helping corrupt law-enforcement officials to extort money from the targets of piracy inquiries.

An international anti-corruption group, Transparency International, and a major Russian human rights groups, Memorial, made the claim over the weekend.

Allegedly corrupt coppers backed by Redmond lawyers would swoop on a company and steal their computers – claiming that they had found pirated copies of Microsoft software.

They would then demand bribes from the company to get their hardware back.

Transparency International said that Redmond should choose its lawyers with a bit more care.

When asked by the New York Times about the accusations, Microsoft said it believed that people who had no legal authority to represent Microsoft were fraudulently using the company’s name to extort money.  Although that is not what the human rights outfits have claimed.

Kevin Kutz, director of public affairs said that Microsoft had been talking to the various human rights groups in Russia and come up with a cunning plan to deal with the problem.

“We have to protect our products from piracy,” Kutz said “But we also have a commitment to respect fundamental human rights.”

Microsoft has been in discussions with human rights advocacy groups on steps it can take in Russia.

It said that it would publish a list of law firms that were supposed to represent it in Putin’s Russia so a company could see if the people carrying the writ were frauds.

It added that the lawyers that it retained “are accountable to us, and if their actions do not comport with professional ethics, anticorruption laws, or Microsoft policies, we terminate our relationship with them.”

However when fake Redmond writs are accompanied by a bent copper with a gun it is still jolly difficult to tell them to go forth and multiply.