Samsung Electronics has once again set a new record high, posting sales of 60.56 trillion won and operating income of 15.64 trillion won during the first quarter of this year, bolstered by strong performance in semiconductors, smart phones and home appliances in overseas markets. Nearly 90 percent of the revenue was earned overseas, while domestic sales accounted for around 10 percent.
Contrary to such buoyant performance, however, Samsung is suffering at home, investigated by the Ministry of Justice, the Prosecutors’ Office, the Ministry of Labor, the Financial Services Commission and the Fair Trade Commission. Prosecutors launched a seizure and search investigation at aftersales service centers and the Korea Employers Federation to investigate allegations of disorganizing labor unions. Financial Services Commission Chairman Choi Jong-ku is pressuring Samsung Life to dispose Samsung Electronics shares worth 18 trillion won, on grounds of separating banking and commerce, which runs counter to global trends.
The concentrated vote system promoted by the Ministry of Justice will significantly impact Samsung’s defense of management rights. Though scrapped in advanced countries, the system has been advocated by Presidential Senior Advisor for Policy Affairs Chang Ha-sung and Fair Trade Commission chief Kim Sang-jo. The two former members of the People’s Solidarity for Participatory Democracy have argued for the implementation of this system as a means for minority shareholders to keep conglomerates in check. The Ministry of Labor has even made a ludicrous order to disclose the blueprints of Samsung’s semiconductor manufacturing plants, though it is currently suspended at the moment.
Given that corporations’ duty to contribute to society is fundamentally rooted in producing good products, making profit, paying taxes and creating quality jobs, Samsung has done more than its own part. Last year Samsung paid corporate tax of 3.79 trillion won alone, not including the income tax paid by its 100,000 employees. Taking its suppliers into account, Samsung’s subsidiaries probably occupy 25-30 percent of the stock market.
Considering its large influence in the national economy, Samsung should have stronger social responsibility as well. The government should rightly demand strict observance of investment scheme laws, safe workplaces and fair labor-management relations. Still, the torment of Samsung has gone far enough. There are several companies that have turned their backs on the anti-business sentiment at home, rising labor costs and other tough conditions, and relocated businesses overseas. We should not ignore Samsung’s remarks that being a global company, it can afford to have its headquarters or main production bases outside of Korea.