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Entry 2020.09.01 14:00 | Revision 2020.09.01 14:14
Even the “don’t be lucky” atmosphere
Given that the prosecution, which has been investigating Samsung’s suspected illegal succession, is prosecuting Samsung Electronics Vice President Lee Jae-yong, the Samsung Group’s judicial risk is expected to increase. Vice President Lee Jae-yong, who attends the trial for several years in a state of disability, expresses concern that normal management will be difficult and Samsung’s super gap strategy will be disrupted. However, I also read the airflow which I am glad I avoided the restriction.
On the 1st, the Seoul Central District Prosecutor’s Office of the Economic and Criminal Crimes Department (Deputy Prosecutor Bok-Hyeon Lee) announced that it had prosecuted Vice President Lee Jae-yong and 11 key people related to the Samsung Group on charges of fraudulent transactions under the Capital Market Law, manipulation of market prices and negotiation of obligations. The prosecution overturned the prosecution’s recommendation that the Prosecution’s Investigation and Deliberation Committee not prosecute and reached a finding to enforce an indictment against Lee.
In today’s semiconductor market, Samsung’s competitors are making aggressive investments. Taiwan TSMC, the number one foundry company (consigned semiconductor production), decided to start producing 2-nano semiconductors by investing 22 trillion won last week. US Nvidia is seeking the acquisition of UK ARM, the world’s largest semiconductor design company, and China’s Changsin Memory (CXMT) and Yangtze Memory (YMTC) are trying to ‘wind up semiconductors’ by declaring mass production of semiconductors.
Foreign media also analyzed that judicial risk will be a variable that will slow down the competitiveness of Samsung’s semiconductors. The Economist, a British economic magazine, said in June: “The investigation by the prosecution may increase judicial risk and uncertainty, which could overshadow Samsung’s performance.” Bloomberg also reported that it would be difficult to make big decisions like mergers and acquisitions without Lee.
The business community is concerned that the prosecution of Vice President Lee will lead to Samsung’s business shrinkage, as the business environment at home and abroad has become difficult due to adverse factors such as prolonged infection with coronavirus (Corona 19) , export restrictions in Japan and trade disputes between the United States and China. In fact, the last time Samsung sought a large-scale M&A was in 2016, led by Vice President Lee, to acquire Harman, a US electronics company for 9 trillion won.
Samsung faced another trial after three and a half years were not completed in 2017 following a special prosecution of the ‘Gukjeong Nongdan’. Business and legal circles believe that Samsung’s judicial risk will continue for the next three to five years. Oh Jeong-geun, professor of economics at Konkuk University, said: “With Corona 19, the world economy is freezing and rivals like the semiconductor war between the United States and China are hitting and escalating.” If even the called the ‘Samsung Life Act’, the fundamental governance structure of the Samsung Group will be damaged. ”
In June, the prosecution applied to the court for an arrest warrant for Lee and others, but it was dismissed by the court. At the investigation deliberation committee requested by Vice President Lee, the investigation was halted by recommending that it be stopped and not prosecuted. Since then, the prosecution is known to have convened professors and experts in the fields of business administration and accounting to hear opinions on the investigation.
Vice President Lee’s decision to prosecute without disagreement is the first instance of noncompliance with recommendations by the prosecution since the prosecution presented the Investigations Review Committee as a self-reform plan in January 2018. The prosecution has agreed to all eight. recommendations in a week, but the vice president’s case has continued to be investigated for more than two months, delaying the decision. On this, criticism came from the business community, saying: “The prosecution is in a hurry to justify the prosecution of Lee.”
However, some say “the worst was avoided” in the sense that it was a jailed prosecution. A business official said: “It is fortunate among the unfortunate that this is not an arrest process, but it is inevitable that restrictions on management activities are unavoidable as we have to go to trial in a state of disability.”
