Nine current and former directors of Samsung Electronics Co. Thursday were ordered by a lower court in Suwon, Korea personally to pay a total of $69 million in damages to stockholders in a class action law suit for failing to stop illegal cross-subsidies to sister affiliates of the parent chaebol.
A Samsung spokesman in Seoul confirmed the court decision but said the directors are expected to individually appeal the verdict against them.
The class action suit brought by 22 shareholders calling themselves the People's Soladarity for Participatory Democracy is almost unprecedented in Korea.
The suit alleged that the directors knew and acquiesed in the then-common practice of using Samsung Electronics funds to bail out other troubled Samsung chaebol affiliate companies. The Suwong court ruled that it was the board of directors responsibility to protect the interests of the stockholders, which it had failed to do.
The spokesman said, without commenting on the allegations in the suit, that Samnsung Electronics doesn't cross-subsidize any of the other chaebol affiliates. The Korean government prohibits such financial bailouts of distressed affiliates within a chaebol.