Lee Kun-hee, the second-generation founder and chairman of Samsung Electronics Co., Ltd., has routinely frequented several prostitutes simultaneously, video clips obtained by independent news cooperative Newstapa revealed on July 21.
Between December 2011 and June 2013, the 74-year-old Samsung patriarch engaged in sexual activity with four or five prostitutes, in their 20s or 30s, on at least five different occasions at two different private residences in Seoul, according to Newstapa. About a year earlier, in March 2010, Lee reclaimed the chairman position of Samsung after a government pardon of his convictions for tax evasion of about U$39 million.
Assisted by two male accomplices, one of the prostitutes taped the five occasions. They, in vain, extorted Samsung for hush money.
Lee suffered from a heart attack in May 2014, and has since been in a coma.
Despite its near-ubiquity, prostitution is outlawed in South Korea. Some of the country’s public would probably shrug off another run-in by Samsung’s Lee. As if in confirmation of Samsung’s influence on the South Korean press, the Korea Broadcasting System, the country’s equivalent of the UK’s BBC, took down a report of Lee’s transgression from its website on the night of July 21.
As of this reporting, none of the so-called three major newspapers (Chosun, Joongang and Dong A) have run a single story. Nor has Yonhap News, the country’s publicly chartered news agency.
On July 22 (Korean time), Samsung released a brief statement apologizing for “causing a controversy in connection with Chairman Lee.”
The conspicuous obscenity and misogyny of his latest criminal misdeed aside, the video clips revealed the long-held pattern of how Lee uses his public companies and treats the people who work for him.
According to Newstapa, one of the two upscale residences Lee used for his sexual escapade is leased under the name of Kim In, Lee’s right-hand man who retired in 2010 as CEO of Samsung SDS, the IT services provider living off related party transactions with Samsung affiliates.
Confronted by Newstapa, neither Kim nor Samsung SDS appeared to be aware of how a security deposit of KRW1.3 billion (U$11.4 million) was paid for the leased house. Samsung Group remains silent on how the payment was made, adding to concerns that Lee still may arbitrarily use the conglomerate’s funds.
Lee’s disregard for basic human and labor rights was also self-evident. He appeared to apply the same tough labor discipline even to his illegal sex workers, the recordings revealed. In one scene, a woman, apparently a go-between, charged a penalty of KRW 500,000 ($440) on KRW 5 million (U$4,400) for each prostitute because they failed to satisfy one of the preferences set by Lee for height, weight, and outfit.
All in all, what Newstapa’s exclusive report implies: Lee’s fall from grace. In South Korea, the patriarch was once touted as a visionary leader for turning a me-too brand Samsung into a global tech giant.
After a series of irregularities, Lee has lost public respect. He is now a subject of public contempt, despised enough to be extorted by petty criminals.
Can Samsung and the founding family turn around the status quo? The answer would depend at least in part on how they will address ongoing occupational disease crisis.
Newstapa, founded in 2012 by a small group of investigative TV journalists who were forcibly dismissed for their demands for editorial independence, files and distributes reports via YouTube and local podcasting platforms. It is a form of cooperative run by donations.
As the sole Korean part of the Panama Papers Project by the International Consortium of Investigative Journalists, Newstapa recently unearthed shell companies owned by POSCO, South Korea’s steelmaker, and children of the country’s former military dictators.
SHARPS’s Sit-in Continues
Since Oct. 7, 2015, SHARPS and its supporters have been staging a sit-in at Samsung D’light, the company’s so-called global exhibition space in south Seoul, calling for the world’s largest technology company to:
1) institute a permanent, independently verifiable safety program;
2) compensate all victims of occupational disease transparently and sufficiently; and
3) make a sincere and full apology.