Concerns are rising in business circles after a group of lawmakers vowed to push for legislation to confiscate profits made through breach of trust or embezzlement, an apparent move to deal a blow to Samsung chairman Lee Kun-hee, his family members, and former and incumbent executives.

Rep. Park Young-sun of the main opposition National Politics Alliance for Democracy and 69 lawmakers including two from the ruling party said they would propose the so-called “Lee Hak-soo bill.”

The business community, however, is expressing concerns that the bill would have a negative effect on the Korean economy due to dwindling investment by the nation’s largest conglomerate.

Some lawmakers and law professors are raising the possibility that the bill could violate the Constitution, which bans double punishment.

Samsung chairman Lee and his former right-hand men Lee Hak-soo and Kim In-joo were convicted in 2009 of tax evasion by issuing warrant bonds of Samsung SDS at 7,150 won ($6.50) per bond, half the market value, in 1999.

A slew of small and medium-sized businesses that rely on Samsung affiliates would also suffer from the consequences of the lawmakers’ move, according to industry watchers.

“The Samsung owner family has already compensated for the financial damage it inflicted on Samsung SDS for acquiring warrant bonds at a discount by paying taxes and returning a large amount of their assets to society,” said an industry official, who declined to be named.

The source said that such a bill was against the Constitution and was only aimed at bashing a specific conglomerate.

The bill also would call for including third parties who benefitted from illegal dealings on the list of those who face confiscation of profits.

If the bill is enacted, it will affect not only the trio but also the chairman’s only son Jay-yong and daughters Boo-jin and Seo-hyun, who benefitted from the issuing of the discounted bonds.

The Samsung children reaped around 5 trillion won combined through the IPO of Samsung SDS in December.

“The ‘Lee Hak-soo bill’ is mainly targeted at confiscating the financial gains of chairman Lee’s children, who were exempt from any penalty back then since they were not directly involved in the tax evasion case,” a market watcher said.

Under the bill, the Justice Ministry can order the courts to penalize those indirectly involved in embezzlement or misappropriation, especially when their financial gains exceed 5 billion won, similar to the laws enacted in the Commonwealth of Nations.

Some pundits, including ones who have been critical of Samsung, however, have admitted that Rep. Park’s initiatives to retroactively apply new laws to the Samsung family and top officials would fail to bear meaningful results.

“All legal issues about the astronomical profits that the Samsung family and top officials earned through the IPO of Samsung SDS have been ironed out,” Kim Sang-jo, an economics professor at Hansung University who is a vocal supporter of economic democratization, was quoted as saying by a local newspaper.

Kim added it would be inappropriate for the lawmakers to back up their bill by citing the Anglo-American law that rules illegal profits earned by third parties involved in illegal activities can be penalized since the rule is only valid when the third parties are unidentified.

By Kim Young-won (wone0102@heraldcorp.com)