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Samsung Electronics Vice President Lee Jae-yong will address the court on the afternoon of the 18th to attend the hearing for the return of the ‘Gukjeong Nongdan’ case held at the Seoul High Court in Seocho-gu, Seoul. The First Criminal Division of the Seoul High Court sentenced Vice President Lee, accused of bribery and other charges, to two years and six months in prison. Vice President Lee, who was being tried in a disabled state, received a warrant that day and was arrested in court. Yunhap news
The worries came true. Regarding the worst-case scenario of arresting the headquarters, Samsung was shocked. On the 18th, when the vice president of Samsung Electronics, Lee Jae-yong, was sentenced to two years and six months, the official position was omitted, but a gloomy atmosphere was detected throughout. A Samsung executive said: “It must have come to the end” and said he regretted the arrest of Vice President Lee. Samsung’s “ no total number ” has been three years since it was released due to parole in February 2018.
Since the beginning of the year, the ‘New Samsung Boat’, which mainly started from Vice President Lee, has been adrift. This is because after the death of President Lee Kun-hee last year, he lost his center of gravity due to the arrest of Vice President Lee, who became the overall leader.
Samsung Electronics Vice President Lee Jae-yong’s Case Record
According to Samsung and others on the 18th, disruptions in medium and long-term management strategies, such as new large-scale investments, are immediately inevitable. A Samsung official said: “The arrest of Vice President Lee is terrible” and said: “The uncertainty is only increasing due to the new coronavirus infection (Corona 19), but I am worried about the future.” With this ruling, Samsung will have to enter emergency management with the total absent until July 2022, but the future is uncertain.
Now that Vice President Lee is jailed again, Samsung is forced to curb the owner-centered “aggressive management move”. Although Samsung Electronics performed well in the semiconductor and smartphone fields last year due to an increase in offline (contactless) demand, it was the third highest in sales (236 trillion 260 billion won), but it does not compete in the global information technology (IT) market. It is fierce. Already in the fields of television and smartphones, China’s search pace is significant. Above all, it is the most painful thing for Samsung that a definitive future food other than household appliances and semiconductors has not yet been secured. It is in this context that Vice President Lee visited Samsung Research, which is researching next-generation technologies such as artificial intelligence (AI) and sixth-generation (6G) communication technology since the beginning of the new year and emphasized that “securing future technologies is a matter of survival. “
Of course, as the owner’s absence dragged on, the impact could be significant, but there are also observations that the immediate impact on Samsung will be limited. A university professor who requested anonymity predicted that “Samsung has a well-established professional management system and investment plans have already been established, so Samsung is unlikely to fall into a crisis immediately.”
However, it is public opinion inside and outside the business world that the absence of an owner will inevitably act as the greatest obstacle to managing the group. A trade official said: “The biggest challenge for New Samsung is to prepare for the decline in the semiconductor economy and grow food for the future. It is difficult to pursue drastic mergers and acquisitions (M&A) and restructurings without the head of Samsung, who can face a crisis “. Indicated. In fact, after Vice President Lee came to the fore in 2014, 14 mergers and acquisitions took place before he was arrested in February 2016, but after that, there were virtually no significant mergers and acquisitions. This is in contrast to the actions of rivals such as SK Hynix and Nvidia and AMD in the US which are growing in size through aggressive mergers and acquisitions.
Furthermore, Samsung, a global company, is also burdened by a blurry external image in the sense that the owner was ousted on bribery charges and was imprisoned again. Some have already raised concerns that Samsung Electronics may be targeted by global hedge funds due to increased uncertainty from Samsung due to this incident.
At the moment, Vice President Lee is unavoidable for “insider management” as he was jailed in 2017-18. However, considering that Vice President Lee’s role has been in direct contact with major overseas clients and leading important decisions such as mergers and acquisitions, there is inevitably a limit to internal management.
Kim Dong-wook reporter [email protected]
News directly edited by Hankook Ilbo can also be viewed on Naver.
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