SEOUL (REUTERS) - Tech giant Samsung Electronics Co Ltd said on Friday (Feb 24) it will strengthen controls for financial support made to third parties, after its vice-chairman was arrested in a graft scandal that could topple South Korea's president.
Samsung said it would now require financial payments of 1 billion won (S$1.24 million) or more to be approved by the board of directors and publicly disclosed. Previously, only payments of 680 billion won or more to third parties were subject to board approval.
The flagship of South Korea's top conglomerate Samsung Group has been at the centre of an influence-peddling scandal that led South Korea's parliament to impeach President Park Geun Hye in December.
Lee Jay Yong, third-generation leader of Samsung Group and Samsung Electronics' vice-chairman, was arrested last week after being named a suspect by the South Korean special prosecutor's office, which is expected to formally indict him soon.
The special prosecution accuses the 48-year-old executive of pledging 43 billion won in bribes, paid via Samsung Electronics and other group affiliates, to a company and foundations linked to Park's confidant, Choi Soon Sil, to curry favour for a 2015 merger of affiliates and his succession to control of the conglomerate.
Samsung Group and Lee have denied paying bribes or seeking improper favours from the president. Lee, who is arguing that he was coerced into making the payments, told lawmakers during a December hearing that Samsung Group would take measures to avoid making improper payments in the future.
Samsung Electronics said on Friday that a committee composed entirely of independent directors would review donations or financial support to outside organisations.
The company also planned to disclose all such payments as part of its overall quarterly business reports.