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Downfall of ex-Samsung strategy chief leaves 'salarymen' disillusioned
August 25, 2017 / 8:31 AM / 3 months ago

Downfall of ex-Samsung strategy chief leaves 'salarymen' disillusioned

SEOUL (Reuters) - Over four decades, Choi Gee-sung, the fourth son of a poor civil servant, worked his way to the top of South Korea’s Samsung Group, one of the world’s leading business empires, inspiring a legion of salaried workers.

FILE PHOTO - Choi Gee-sung, chief executive of South Korea's Samsung Electronics, speaks during an annual shareholders' meeting at the company headquarters in Seoul March 18, 2011. REUTERS/Truth Leem/File Photo

On Friday, a Seoul court sentenced Choi to four years in jail for his part in a corruption scandal that toppled the country’s president, and handed his billionaire boss, Jay Y. Lee, a five-year jail sentence.

Song Wu-cheol, lead defense attorney for Choi, Lee and others, said they would appeal the convictions.

Choi’s downfall has fueled a sense of disillusionment at a time when the country’s biggest conglomerate looks to its army of loyal “Samsung men” to navigate a potential leadership vacuum.

Choi was Lee’s mentor and headed up Samsung’s Corporate Strategy Office - dubbed the ‘control tower’ - for more than four years before it was disbanded earlier this year after it came under fire for its role in the graft scandal.

The office, which oversaw the Samsung group, orchestrating the big decisions on asset sales or arranging support for weakened group affiliates, was closed in February, and Choi stepped down.

The Samsung scandal is the latest in a series to mire South Korea’s so-called chaebols - the powerful, family-run conglomerates that dominate Asia’s fourth-largest economy - which are criticized for their often cozy ties to politicians.

The involvement of Choi - who rose as high in a conglomerate as possible for someone from outside the powerful chaebol families - has shocked many Samsung employees who admired his business acumen and work ethic that helped Samsung become a global technology powerhouse.

“Choi has been portrayed as a poster child of a successful businessman ... I am dejected and angered by this scandal,” said one Samsung employee who declined to be identified.

A Samsung company official said: “It’s hard to do a job like that without loyalty. If the previous generation’s frame of thinking was loyalty, that’s got to change going forward.”

Known for his tenacity, attention to detail, and focused drive, Choi took credit for helping Samsung Electronics, the group’s crown jewel, overtake Nokia and Apple Inc in mobiles and Sony Corp in television manufacturing. It is also the world’s leading chipmaker.

“I played a part in today’s Samsung standing tall as the No. 1 in semiconductors. We surpassed (mobile firm) Nokia when everyone thought it couldn’t be done,” Choi recalled during his trial testimony, as Lee and other charged Samsung executives sat alongside.

“The day media reported Samsung surpassed Intel as the No. 1 in semiconductors was the 40th anniversary of my first day at Samsung. It was also the day when the court hearing continued until 2 a.m.,” he said, referring to late July when Samsung reported record earnings on strong chip sales.

“I was overwhelmed with feelings of regret, reflection and sadness.”

TO “PROTECT” SAMSUNG

Born into a poor family during the Korean War in 1951, Choi joined Samsung in 1977 to “put food on the table” after studying at the prestigious Seoul National University.

Having worked in all Samsung’s main businesses - from chips and mobile to display screens - Choi was among the few to rise to the top without an engineering background. He became CEO of Samsung Electronics in 2010.

“Some people like me think that the higher up you go, the harder you have to work and the more unjust things you have to deal with,” said a 33-year-old Samsung employee, who declined to be identified. “I think he (Choi) may have agonized, though it was his choice to take the job.”

As head of the ‘control tower’, Choi said he accepted greater responsibility than Lee, and the decisions he made over matters related to the scandal were inevitable to “protect” Samsung from political pressure.

The chaebols dominate the local economy, providing millions of jobs and defining many people’s identity in South Korean society. Salaried workers are expected to serve them with long hours and unquestionable loyalty.

That culture puts top executives under pressure to take the blame for their boss, experts say.

“It’s like Japan’s samurai, who sacrifice their lives for the sake of their masters,” said Chung Sun-sup, head of Chaebul.com, a corporate analysis firm. “It’s very regrettable, but that’s the reality of what’s expected from professional managers.”

It’s a path Choi felt he had little option but to take.

“If you were to hold Samsung responsible, please blame me. I am aging and lost judgment ... Others just trusted me and followed my judgment,” he told the court during the trial.

Additional reporting by Jane Chung and Ju-min Park; Editing by Miyoung Kim and Ian Geoghegan

Our Standards:The Thomson Reuters Trust Principles.
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