Samsung faces crisis after chairman quits: executive

South Korea's largest business group Samsung faces a leadership crisis after its chairman quit in the wake of a scandal, the acting chairman said on Wednesday.

"Without a captain or rudder, Samsung now faces a complex crisis, with each unit meeting cut-throat competition independently," said Lee Soo-Bin.

"The group was able to ride out a previous crisis together thanks to former chairman Lee Kun-Hee's strong leadership and the guidance of the Strategic Planning Office. Now we cannot do so."

Special prosecutors this year mounted a three-month probe into corruption allegations against the multinational and charged Lee Kun-Hee in April with tax evasion and breach of trust.

He quit the group later that month after almost 20 years at the helm and is now on trial.

Samsung announced management changes, scrapping the 90-strong Strategic Planning Office. It acted as the "control tower" of the loose-knit group, which has 59 affiliates, but was implicated in the scandal.

The group has created two decision-making committees of chief executives from various affiliates to address fears of a vacuum in decision-making.

Acting chairman Lee Soo-Bin, the chairman of Samsung Life Insurance, was speaking after holding the first meeting with chief executives of affiliates since Lee Kun-Hee's departure.

When his trial began on June 12, Lee Kun-Hee accepted blame for any lapses at the group, which employs 250,000 people and accounted for more than 20 percent of the nation's exports last year.

But his lawyers are contesting the specifics of the charges.

The key point is whether Lee instigated and planned the controversial transfer of control over the group from himself to his son Lee Jae-Yong.

Both father and son appeared in court Tuesday, with the son a defence witness for his father.

Lee senior denied authorising the issuance of low-priced bonds, the basis of the breach of trust charge, so that his son could take over.

He is also charged with evading a capital gains tax bill of 112.8 billion won (110 million dollars) and could technically face life in prison if convicted.

Most other Korean tycoons brought to court on criminal charges have escaped severe punishment, with judges citing a negative impact on the economy.