the brunt of the losses, despite having invested his own money. Samsung
ordered nine Samsung affiliates to buy up the failing e-Samsung shares,
relieving Jay Lee of much of the financial damage—a decision that sparked
a government investigation. Merrill Lynch claimed that the e-Samsung
shares were overvalued.
“I dispatched two Restructuring HQ legal team lawyers...to the
investigation site,” Kim wrote, “...to destroy the relevant documents. This
effort was successful, and the Fair Trade Commission found us not guilty.”
Kim explained how he personally instructed employees, using a training
manual, to destroy evidence and protect their leaders in the case of an FTC
investigation by the Korean government, a tactic he called the “FTC
checkpoint.”
“FTC investigators cannot show up with a warrant—they need to have a
certification,” he told the employees. “So first, buy time by checking their
certification. During that time, download all the documents from the
computer and hide them, and delete everything on the computer. If there
isn’t enough time, deleting the files is the priority.”
Over the years, South Korea’s FTC investigated and fined Samsung
Group affiliates six times after they were caught destroying evidence,
blocking the investigators from entering, and obstructing justice.
With the failure of e-Samsung coming on the heels of the high-profile
failure of Samsung Motors in 1999, the mood within the company was
glum.
“Failing in cars, failing in ventures,” employees said.
Minority shareholders complained that the debacle showed that Jay Lee
was more entitled than he was competent. In the aftermath, Jay took on a
lower profile, one carefully managed by company aides. He focused on
learning the ropes under G.S. and others, and serving as a liaison with
Apple and other companies that needed Samsung components.
“The only people who really knew him or what he was doing were his
‘guides,’ ” recalled Park Sang-keun, a former senior vice president at
Samsung Electronics’ wireless terminals division.
Alan Plumb, the regional director for Rolls-Royce, was having lunch at
the Seasons restaurant in the Millennium Seoul Hilton with his South
Korean partner Hyun Hong-choo, a Rolls-Royce adviser and partner at the
well-connected Korean law firm Kim & Chang, when he saw Jay dining
nearby with his mother. Hyun told Plumb that he was Jay’s mentor,