Samsung Chairman Indicted for Allegedly Sabotaging Labor Union

(Bloomberg) -- South Korean prosecutors indicted the board chairman of Samsung Electronics Co. on charges of illegally cracking down on a labor union, delivering another legal blow to the world's largest chipmaker.

Prosecutors in Seoul said Thursday they have charged Lee Sang-hoon with leading an operation to sabotage a newly formed labor union at Samsung's customer-service unit in 2013 when he was chief financial officer.

“This is meaningful in that Samsung's long-disputed policy of not tolerating labor unions has mostly turned out to be true,” prosecution official Kim Soo-hyun said at a televised briefing, adding that 27 other people from Samsung and its partnering firms have also been indicted on similar charges. Samsung declined to comment.

The indictment adds to legal troubles at the top of South Korea's biggest company with Vice Chairman Jay Y. Lee this year receiving a suspended prison sentence for corruption in relation to former President Park Geun-hye. The Seoul Central District Court earlier this month rejected a request from prosecutors to detain Lee Sang-hoon for questioning.

Lee Sang-hoon, who isn't related to Jay Y. or the founding family, became chairman in March this year in a shakeup of leadership that strengthened the oversight of the company by the board. Jay Y., grandson of the company's founder, is a member of the board and his conviction is being appealed in the Supreme Court.

To contact the reporter on this story: Sam Kim in Seoul at skim609@bloomberg.net

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Peter Elstrom, Edwin Chan

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