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This article was published on September 1, 2020 at 4:00 p.m. The Bell payment pageThis is the article expressed in

When Samsung Electronics VP Lee Jae-yong’s judicial risk surfaced again, uncertainty in management increased. Currently, none of Samsung’s affiliates have Vice President Lee as a registered director, so the issue is not expected to occur immediately. However, due to the slowdown in demand for memory semiconductors and the competition for the number one memoryless smartphone, it was caught in a situation where preventive investment and judgment were required in the medium and long term.

On the 1st, the Seoul Central District Prosecutor’s Office, the Department of Economic Crimes and Criminal Affairs, announced that as a result of the investigation of the ‘Illegal Merger and Accounting Error of the Samsung Group’, it has prosecuted a total of 11 people related to Samsung, including Lee Jae-yong, the total number of people. There was a recommendation for non-prosecution by the Prosecutors’ Investigation and Deliberation Committee, but this was not reflected. The prosecution said it decided to prosecute by combining the critical opinions of outside experts and the results of the review of the meeting of chief prosecutors.

The Samsung side said that Vice President Lee and other key figures have fought again in the courtroom, but they plan to continue their tenure without commercial breaches. Currently, there is no vice chairman of the board of directors of Samsung Electronics. Vice President Lee was elected internal director of Samsung Electronics in October 2016 at an extraordinary shareholders meeting, but did not extend his term on October 26 of last year. It seems that the mandate has not been extended because it is judged that it could be a burden for management in the presence of legal risks.

Lee Sang-hoon, former chairman of the board of directors, also left the board this year, expressing his gratitude. Consequently, Park Jae-wan, former Minister of Strategy and Finance, was elected chairman of the board of directors this year. This was the first case in which an external director became chairman of the board of directors. In addition, Han Jong-hee, general president of the video display division, and Choi Yoon-ho, president of the management support department, joined the board of directors, controlling the management.

As a result, major affiliates, including those above, are unlikely to change significantly in the current system. However, it is pointed out that the problem is the situation where the change cannot be considered. It is evaluated that it is difficult to make medium to long-term decisions in the future, although it is enough to make management decisions that must be taken immediately for each subsidiary. Large-scale mergers and acquisitions (M & As), medium- and long-term investments and staffing are not easy, so it is said that it is fortunate that even the status quo is maintained.

Samsung’s large-scale investment comes from Lee’s judgment. In 2018, Samsung Electronics decided to invest a total of 180 billion won in economic revitalization, job creation, and promotion of new industries. In 2019, it announced ‘Semiconductor 2030’, which aims to become the # 1 system semiconductor in 2030, and made a 133 trillion won investment decision. Samsung Display also showed its willingness to dominate the next-generation display market by investing 1.3 trillion won in quantum dot (QD) displays.

In addition, Vice President Lee has addressed major issues by field management of all subsidiaries, including the first. They visited production sites for semiconductors, displays, home appliances, and MLCC for electronic equipment. Eui-sun Eui-sun met with the senior vice president of Hyundai Motor Group to discuss cooperation in the electric vehicle business. Additionally, Samsung Biologics’ new establishment of the world’s largest biopharmaceutical production facility and Samsung SDI’s research and investment in solid-state batteries are also important issues that cannot be overlooked.

This time, the prosecution is expected to prolong the battle as the prosecution added a charge of violating the Capital Market Law (fraudulent transaction and market price control) and violating the External Audit Law, as well as negligence related to the deal. Samsung lawyers said: “It was added in the commercial negligence prosecution process that it was not even mentioned at all during the deliberation of the injunction request and the investigation deliberation committee.” “It is denying”, showing a strong position.

Additionally, the executive vacancy of Lee’s management is expected to increase, with Samsung’s lawyers deciding to reveal the injustices of this accusation in court through trial. If so, Samsung Electronics’ management difficulties, which had been salvaging even in the coronavirus-19 (Corona 19) infection situation, will be inevitable.