Monday, April 21,2008 @ 11:20pm
Samsung head quits, company vows reform
Samsung chief Lee Kun-hee on Tuesday criminal indictment over allegations of breach of trust and tax evasion in his native Korea. The move fulfills claims made by Lee that he would consider stepping down to assume responsibility for financial irregularities at Samsung, though to date the executive has so far denied personal connection to the claims, which have also accused him of practicing nepotism to ensure his son takes over the company.
Lee's departure is described by Samsung as starting a new chapter at the company, which has formally apologized for the scandal and says it will rework its internal structure to prevent legal trouble in the future.
The resignation eases tensions in Korea's electronics industry. Government officials have warned of a ripple effect that would be created by imprisoning the executive, which would by itself affect Samsung's day-to-day management and in turn create problems both for Samsung's electronics output as well as the larger Korean economy.
The firm is considered the single largest in Korea and is also the largest individual electronics brand in the world, with any potential shortfall not only affecting its own products but also companies that depend on its parts, such as Apple and its reliance on Samsung processors and flash memory for both the iPhone and iPod lines.