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FSS Gov. Lee apologizes for role in Samsung Electronics chief's indictment

Published: 06 Feb. 2025, 16:50

SHIN HA-NEE
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Financial Supervisory Service (FSS) Gov. Lee Bok-hyun speaks during a seminar on the Korean financial market stimulation held in western Seoul on Feb. 6. [FSS]

Financial Supervisory Service (FSS) Gov. Lee Bok-hyun, a prosecutor-turned-regulator, apologized for his role in indicting Samsung Electronics chief Lee Jae-yong, who was recently acquitted by a high court.

“I apologize to the public as someone who had been in charge of the indictment,” Lee told reporters on Thursday, after attending a seminar on the capital market stimulation at the Korea Exchange in western Seoul.

“First of all, I respect the judiciary’s decision,” said Lee, while acknowledging that he had refrained from commenting on issues related to his previous position as a prosecutor “to prevent any misunderstanding.”

“As the one who had made the decision to indict and drafted the indictment, I apologize for failing to make a case solid enough to persuade the court,” Lee stated.

The apology came after the Seoul High Court upheld a lower court’s decision to acquit the Samsung chairman of 19 charges, including unfair trading and stock price manipulation, regarding the controversial 2015 merger of Cheil Industries and Samsung C&T.

Before being appointed to lead the FSS, Lee served as the chief prosecutor specializing in financial crimes.

The governor, however, stressed that the recent acquittal proved the case for stronger regulation on shareholder protection.

“From issues related to Everland’s convertible bonds to the Samsung C&T’s merger, the court found it difficult to acknowledge [the priority of] shareholder value protection based on the current legal text,” said Lee, adding, “As such, I believe this proves that it is necessary to make legislative revisions to the Capital Markets Act and other relevant laws.”

Financial authorities have been pushing to revise the Capital Markets Act to bolster minority shareholder protections during mergers and acquisitions (M&As). The proposed amendment will stipulate that board members of listed companies be explicitly required to protect general shareholders’ interests in decisions related to M&As, share transactions, sales of key assets or operations and corporate split- or spin-offs.

During the Thursday event, Lee once again called for a structural and cultural overhaul of the capital market under the government-led Corporate Value-up Program, stressing that the country’s financial market faces a critical juncture amid multilayered crises.

“Now is the time to take a hard look at the realities of our capital market,” said Lee in his opening remarks.

“If we fail to continue with the discussions to improve the capital market, we may lose our chance to make progress forever.”

Lee highlighted that the Korean capital market has been caught up in a “two-front war,” where it must compete with more advanced markets and the fast-growing crypto market.

“An overconcentration on specific industries and a delayed growth of innovative sectors have led to reduced investment opportunities, while foreign capital outflow and retail investors’ shift toward U.S. markets are also undermining our investor base,” the governor noted.

“On top of that, the escalating trade conflicts and tech race have impacted not only the real economy but also the fundamentals of the capital market.”

The accelerating exit of younger generations from the domestic stock market — and toward the U.S. exchanges — has been eroding the country’s growth potential, Lee said, promising to devise measures to encourage long-term investments.

BY SHIN HA-NEE [[email protected]]