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Samsung decides to abolish control tower after heir's indictment

Xinhua, February 28, 2017 Adjust font size:

Samsung Group, South Korea's biggest family-controlled conglomerate, announced its decision Tuesday to abolish the group's control tower after the announcement by special prosecutors of a plan to indict the Samsung heir for bribery charge.

The so-called future strategic office of Samsung Group will be broken away, encouraging each Samsung affiliates to conduct independent management by professional executives.

The control tower was created in 1959 by Samsung founder Lee Byung-chull as his secretary office to solidify the founding family's overall management of affiliates.

The office has changed its name several times whenever it was under public criticism for assistance to inherit the management control from Lee Kun-hee, the second-generation leader of the business empire, to his only son Lee Jae-yong.

The younger Lee, the vice chairman of Samsung Electronics, has taken the helm of the electronics giant since his father was hospitalized for heart attack in May 2014.

Right before the Samsung announcement, special prosecutors having investigated the presidential scandal in the past 70 days announced its plan to indict the younger Lee for bribery charge.

Four other senior Samsung executives, including the head and the vice head of the future strategic office, will also be prosecuted without detention.

The Samsung heir is suspected of bribing the impeached president's longtime friend in return for getting support from the national pension fund in the 2015 controversial merger of two Samsung affiliates.

The merger was crucial to Vice Chairman Lee to inherit the group's overall management control from his ailing father.

Lee's legal team has claimed Samsung had been extorted into making donations to the foundations that Choi Soon-sil, President Park's decades-long friend, used for personal gains. Endit