[Free Speech Forum] Lee Jae-yong Detained in Court... We Must Not Repeat the Error of Confusing Church and State

There is a four-character idiom, “gyowanggwajik” (矯枉過直). It means that in trying to straighten something crooked, one makes it excessively straight and ends up ruining the matter instead. It was the first phrase that came to mind when I heard the news that Samsung Electronics Vice Chairman Lee Jae-yong had been taken into custody by court order. Why did the phrase gyowanggwajik flash through my mind upon hearing the ruling?

Last month on the 18th, Samsung Electronics Vice Chairman Lee Jae-yong was sentenced to 2 years and 6 months in prison and was immediately taken into custody in the retrial following remand in the state affairs manipulation case. The court found him guilty of allegations that he had provided bribes to former President Park Geun-hye and Choi Soon-sil in an effort to gain help in the process of transferring management control of the Samsung Group. In addition, there has been talk that due to Article 14 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, which restricts employment, he may not be able to participate in Samsung Group’s management activities even after serving his sentence.

I believe Samsung’s management should humbly accept the public criticism over conduct that caused social controversy and resulted in legal punishment. This is because a leader who heads the Samsung Group, one of the world’s leading companies, clearly has a social responsibility to serve as a role model for the rising generation.

But an unpredictable situation brought on by the COVID-19 crisis is now unfolding before us. In such circumstances, we must not make the mistake of focusing only on punishing entrepreneurs while failing to prepare for the future. While countries around the world are implementing pro-business policies to overcome the difficulties caused by the pandemic, it is not desirable for us alone to be consumed with pressuring businesses.

In the early 20th century, the Spanish flu reshaped the global market, even contributing to the transfer of world hegemony from Britain to the United States. Now, 100 years later, the COVID-19 crisis has once again brought major changes to the global market, and more than ever, we need the Samsung Group’s swift management activities.

Samsung had already been pursuing future-oriented policies, pledging in 2018 to invest 180 trillion won in AI, 5G, electronic equipment, and the bio industry. However, due to Vice Chairman Lee Jae-yong’s imprisonment and various internal and external factors, the company is in a position where it is difficult to actively pursue large-scale mergers and acquisitions in new industries such as system semiconductors.

U.S. company Nvidia has acquired ARM, the British semiconductor design firm, and Apple has announced plans to produce electric vehicles, showing how other competitors are moving quickly in step with a changing world. Hong Kong’s leading media outlet SCMP reported that Taiwan’s TSMC, which is engaged in fair competition with Samsung Group in the field of advanced semiconductor processing, is expected to win orders from Apple, Qualcomm, and Nvidia for 3nm processes.

While rival firms are actively seeking change amid a rapidly shifting global market, Samsung, hamstrung by the absence of its top leader, may be unable to carry out normal business activities. Is this really desirable for us?

Vice Chairman Lee Jae-yong has shown remorse and repentance for his wrongdoing on several occasions. As Korea Chamber of Commerce and Industry Chairman Park Yong-maan has argued, perhaps we should once again reflect on whether this is a ruling that deserves to be called gyowanggwajik (矯枉過直).

Seungjin Kang, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [자유발언대] 법정구속된 이재용...교왕과직의 우를 범하지 말아야

Author: Seung-jin Kang

Date: 2021-02-02

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=12&idx=23469