Samsung Electronics apologizes

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Samsung Electronics apologizes

Samsung Electronics issued an official apology after a Seoul court Tuesday jailed Board Chairman Lee Sang-hoon for sabotaging labor activities.

The company “deeply apologizes for causing concerns and disappointment for many people regarding labor issues,” Samsung Electronics wrote in a statement issued Wednesday.

“We humbly accept the fact that the company’s perspective and perception on labor unions in the past did not meet public standards and social expectations,” the statement added. “From now on, the company will establish a future-oriented and healthy labor-management relations based on respect.”

The comments suggest a significant shift for the company, which had stuck to a “zero labor union” principle for eight decades.

Last month, a Samsung Electronics labor union under the Federation of Korean Trade Unions was formed. The company had three small-sized labor unions before, but this was the first to be established under one of the country’s two largest umbrella union groups.

On Tuesday, the court ruled Lee and 25 former Samsung employees were guilty of violating domestic union laws and sentenced seven to prison. They were accused of formulating and executing plans aimed at disrupting labor organizing.

“The impact of Lee’s indictment on the business will be minimal, but the fact that a board chair was placed behind bars can taint Samsung’s reputation as a global company and can have the negative effect of pulling down morale among employees,” said an industry source.

Lee was serving as a chief financial officer at Samsung Electronics when the future strategy office - once hailed as Samsung’s central control tower - issued orders to sabotage labor unions. The order was first disclosed in 2013 when internal Samsung documents were published by a lawmaker.

Despite Lee’s claims that he was not aware of such activities, the judge said Tuesday that numerous documents prove the central office’s influence over affiliates in disrupting labor union activities and added Lee’s lack of familiarity with some facts does not clear him of the criminal act.

His sentence reduces the number of internal board members at Samsung Electronics to three from five in September. Samsung Electronics Vice Chairman Lee Jae-yong finished his term in late October.

As for Board Chair Lee’s replacement, a Samsung spokesman said that matter has not yet been decided. The company does not have rules on crimes committed by board members, so in principle, Lee will be able to maintain his position as board member.

The Tuesday court decision brings the number of indicted Samsung top executives, above vice president level, to five in the past two weeks.

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