Left Flank

Which one of this paragraphs is closer to the mark, the first, or the second?

Alongside Mr Lee's resignation, and those of other managers, Samsung announced a series of reforms. It will donate a large sum to «a good cause», undo some labyrinthine cross-shareholdings, and (to assuage concerns about its dominance) will not enter the retail-banking market when it is opened up later this year. Samsung's strategic planning office, which concocted a variety of dodgy schemes, will be closed. The younger Mr Lee, who was not charged, resigned as a senior executive at Samsung Electronics and will move to a different role in the group, based abroad.

By South Korean standards these are drastic moves, and may represent an acknowledgment that corporate-governance reforms are needed. But sceptics wonder whether the changes are merely cosmetic. The Lee family will still be Samsung's largest shareholder, and many of its loyal lieutenants remain in senior positions. Although Mr Lee technically faces a life sentence, few believe he will spend time in jail. He will not be replaced as chairman, and it is assumed that his son will return home after a couple of years to take up the post, once public anger has dissipated. That could prove to be the real test of how much things have changed.

Businessweek:

Some activists argue the reforms fall short of guaranteeing the prevention of the family's return. «The problem is the son can always be elevated to the chairman and assume near-absolute control unless a system is built to guard against such practices,» says Korean National Open University economist Kim Ki Won, who has studied the chaebol for two decades. «My hunch is that there's only a 30% chance of Samsung achieving a good governance system in view of the lack of reference to the son's illegally earned benefits.»

Others, though, are more hopeful. «I respect today's move by Chairman Lee, who unlike other chaebol chiefs, personally took responsibility for wrongdoings,» says Jang Ha Sung, dean of Business Administration College at Korea University and a longtime promoter of shareholder rights. «What's still needed is to build a sustainable system enforcing transparency and accountability.»

...and Bloomberg echo the «standing at the crossroads» vs. «business as usual» predictions.

While Lee's indictment last week on charges of breach of duty and evading about $113 million in taxes blunted his ethics push, the announcement yesterday that he and other top Samsung executives will step down puts more at stake. The chaebol model itself -- criticized by outsiders as a closed network even as it poured investment into the economy -- may be unraveling, according to some analysts.

The announcement signals ``an end to the era of the Masters of the Universe,'' says Tom Coyner, who helps advise foreign investors in Korea as president of Soft Landing Consulting Ltd. in Seoul. ``The resignation by Chairman Lee Kun Hee is unprecedented.''

Actually, I see some conveniently aristocratic logic at work here. As ROK's economy slips into lower growth and slips a global notch to 13th, it's difficult to claim Lee has all the magic he once did. The Lone Star decision seems like more of the same, too. It's almost like throwing scraps to the dogs. I'll put a marker on a predictable future.