Tech Industry

Samsung increases transparency on donations amid scandal

The company lowers the monetary threshold for financial donations requiring board approval.

Samsung headquarters in Seoul, Korea.
Jung Yeon-Je/AFP/Getty Images

Samsung said Friday it will strengthen its rules on financial donations to increase transparency after its vice chairman was arrested in a corruption scandal.

The South Korean company said it would now require financial donations and funding for corporate social responsibility of 1 billion won ($882,460) or more to be approved by the board of directors. Previously, only payments representing 0.5 percent of shareholder equity -- 680 billion won or more -- required board approval.

The new policy is in reaction to the arrest last week of Jay Y. Lee, Samsung's vice chairman and acting head, in a political scandal that has rocked the country. Lee has been accused of bribing the suspended South Korean president, Park Geun-hye.

At issue is whether millions in donations Samsung made to two foundations controlled by President Park's friend and confidant, Choi Soon-sil, were bribes to get the South Korean pension fund to back a merger between two of Samsung Group's holding companies. The merger strengthened the Lee family's control over Samsung.

Lee also faces charges of perjury and embezzlement.

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