Dispute Over Selection of Compliance Oversight Committee Expert Advisor... Lee Jae-yong's Legal Team Deliberates During Lunar New Year Holiday

Vice Chairman Lee's Side Has Not Yet Appointed a Professional Psychological Committee Member

Samsung Electronics Vice Chairman Lee Jae-yong is entering the funeral hall of the late Shin Kyuk-ho, Honorary Chairman of Lotte Group, set up at Seoul Asan Medical Center in Songpa-gu, Seoul, on the 20th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Ki-min Lee] The legal team of Samsung Electronics Vice Chairman Lee Jae-yong, who is undergoing a retrial on charges including embezzlement, is working hard even during the Lunar New Year holiday to prepare for the specialized review procedure of the Compliance Committee ordered by the court. Although there is an analysis that the Compliance Committee is increasingly likely to be reflected in Lee's sentencing, they plan to prepare thoroughly as the results cannot yet be predicted.

According to Lee's legal team on the 27th, the Criminal Division 1 of the Seoul High Court (Presiding Judge Jung Jun-young) is working on selecting specialized review committee members for Samsung's Compliance Committee even during the Lunar New Year holiday. Lee's legal team said, "We have not yet appointed specialized review members," adding, "There are differing opinions among the lawyers about what kind of abilities and qualifications the recommended individuals should have."

Earlier, on the 17th of this month, Lee's trial court announced at the 4th retrial hearing that after hearing the defense team's explanation about the newly established Samsung Compliance Committee, it would proceed with a specialized review.

The specialized review refers to the process of determining the effectiveness of the Compliance Committee in monitoring the possibility of illegality in company decisions and top management judgments and actually preventing such issues. The court designated former Constitutional Court Justice Kang Il-won as one of the specialized review members and requested that both the defense and the special prosecution each recommend one specialized review member by the next trial. Accordingly, Lee's next hearing will not be the 5th trial but a preparatory hearing for the Compliance Committee specialized review, scheduled for the afternoon of the 14th of next month at the Seoul High Court.

As the establishment of the Compliance Committee is increasingly seen as likely to have a favorable impact on Lee's sentencing, legal circles analyze that this procedure is important for Lee's side.

The Criminal Division 1 of the Seoul High Court, which is Lee's trial court, overturned the first trial that sentenced Booyoung Chairman Lee Joong-geun to five years in prison on charges including embezzlement and instead sentenced him to two years and six months in prison on appeal.

In Lee's sentencing statement, the court cited as a sentencing reason, "(Booyoung) established a Compliance Office in May 2018 and made efforts such as signing a delegation contract with an external 'Compliance Officer' who independently performs Booyoung's compliance monitoring duties as of January last year."

Regarding this, Lee's legal team maintains that it is too early to make a judgment. Lee's lawyers said, "The court's order to establish compliance management procedures and the request for specialized review are unprecedented for the defense team," adding, "Not all criminal cases are the same, and it is impossible to predict how this will be reflected in sentencing."

Meanwhile, since the special prosecution and prosecution expressed a negative stance during the 4th hearing about the court not accepting evidence submitted by the special prosecution and proceeding with the Compliance Committee specialized review, they are expected to raise opposing opinions again regarding the specialized review at the next preparatory hearing.