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Samsung execs pass buck to biotech subsidiaries for destroying evidence
  • By Jeong Sae-im
  • Published 2019.10.04 11:42
  • Updated 2019.10.04 15:19
  • comments 0

Samsung executives said Samsung BioLogics and Samsung Bioepis workers were responsible for deleting data excessively, during a trial over the alleged window dressing of Samsung BioLogics. They ordered data deletion to “prevent unnecessary misunderstandings” about Samsung, but the two companies unexpectedly replaced servers, they claimed.

The Seoul Central District Court on Wednesday held the second trial on eight executives of Samsung Bioepis, Samsung BioLogics and Samsung Electronics who were indicted on charges of distorting and destroying evidence, and participating in attempts to delete evidence.

The prosecution said vice presidents at the business support task force of Samsung Electronics received prior notice from the Financial Supervisory Service’s response to the company’s alleged accounting fraud on May 1, 2018. On May 5, Samsung Electronics held an urgent meeting at the head office in Seocho-gu, southern Seoul. The managers of Samsung subsidiaries ordered each unit to delete relevant data in preparation for the prosecution’s raid.

Samsung BioLogics, under the order, deleted the data in the finance and planning team’s shared folder from the main server and log records. The company also hid the backup server, the previous central server, and the last server backup under the floor of the communications room.

Samsung Bioepis also replaced the finance team's computers and mobile phones of employees and deleted all the data searchable by particular keywords.

During the appeals trial, Samsung Electronics executives said that they ordered employees to delete data of Samsung BioLogics to prevent unnecessary misunderstandings. However, in the process where their instructions were delivered through various channels, employees interpreted the scope of “unnecessary data” differently from person to person, and they ended up replacing the whole server, they claimed.

“Samsung has always been under scrutiny and watch from various agencies. For more than a year and six months, we have been raided 15 times. New suspicions emerged which hit our corporate image hard,” a lawyer representing the Samsung Electronics executives said. “To prevent unnecessary misunderstandings, we ordered data deletion, intending to delete outdated and unnecessary materials. However, employees interpreted this differently, person to person, and as this message was delivered through different channels, the employees replaced the entire server.”

However, the prosecution said the defendant's remark that they deleted data because of frequent raids made it more apparent that they committed a series of crimes mindful of the prosecution’s raid. “This means that they voluntarily admitted that they destroyed evidence intentionally,” the prosecution said.

The prosecutors also pointed out that if Samsung Electronics vice presidents say Samsung BioLogics and Bioepis workers deleted data beyond the order of their seniors, the workers will feel unfair.

“In particular, the security worker did as he was told. It is wrong to claim that he voluntarily conducted an act that was not ordered,” the prosecution added.

The prosecution and the defendant fought a fierce battle over the scope of the crime of evidence destruction, too.

The accused said the prosecution was applying the term too broadly. Deleting data before an investigation cannot always be regarded as the crime of evidence destruction, they claimed, insisting on examining the relationship between the evidence that was destroyed and the criminal case of others.

“There is data that is not relevant to the case, and there is other, relevant. Even if the data is relevant, the degree of relevance can be different. The validity of the crime of evidence and the determination of the punishment can differ, depending on the nature of the data,” the defendant said.

According to the defendant, the prosecution designated only 20 documents, including the FSS’ special monitoring for investigation and left other documents regarding call option agreements and equity structure untargeted. It is the prosecution’s responsibility to prove if these documents were connected with a crime, they said.

The prosecution rebutted their claim head-on. Due to the special aspect of evidence destruction, every document does not need to be specified, it said. Repeating the claim to specify all of over 10 million data is to delay the trial intentionally, it noted.

“If they want to argue for the relevance of data, they have the materials, too, so they can specify the data themselves. Asking the prosecution to analyze all the data seems they are intended to delay the trial,” the prosecution said.

“We cannot understand their argument that their crimes can be reduced because there are more irrelevant data in 10 million files. We have many irrelevant materials because the defendant replaced the entire server to conceal evidence during our raid thoroughly. This is all the more why we should regard their acts as a serious crime,” it added.

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