Samsung Electronics Vice Chairman Lee Jae-yong is present at a hearing on the 18th afternoon at the Seoul High Court in Seocho-gu, Seoul. Reporter Woo Sang-jo
Samsung Electronics’ vice chairman Lee Jae-yong, who was tried in the case of Gukjeong Nongdan, was sentenced to two years in prison on the afternoon of the 18th, and was arrested by court. Vice-Chairman Lee was arrested only 1078 days after he was released on probation in February 2018. Following the death of Chairman Lee Kun-hee in October of last year, Samsung was shocked when Lee, the central point of the group, was arrested after three months.
Executives and employees Du Sung-sung, no separate position
System semiconductor 133 trillion investment plan, etc.
Possible disruption in securing new growth engines
18 trillion won evaporated in a day yesterday
From this morning, there was silence throughout the Samsung Electronics office building in Seocho-dong, Seoul. At around 2:20 pm, the atmosphere became heavier when the news that Vice Chairman Lee was arrested came out. A senior official at Samsung Electronics said, “In a word, I have nothing to say except to say’it’s disastrous. In fact, the company expected a probation, so the impact was greater.” Another Samsung Electronics official said, “The executives of most departments are holding emergency meetings until late in the afternoon.”
Vice Chairman Lee visited the Pyeongtaek semiconductor plant on the 4th, and two days later, the Samsung Research Center emphasized “Let’s take responsibility as a leading company several hundred times.” An executive of Samsung Electronics said, “But the whole company is devastated because of the unexpected results.”
Increasingly, the timing of preoccupying new technologies is more important, and there were concerns that Samsung could miss the opportunity due to the absence of Vice Chairman Lee. Former Samsung Advanced Institute of Technology Son Wook said, “I am worried that Samsung’s innovation will slow down. I cannot guarantee that Samsung will not follow the steps of Sony, which once crashed.”
Samsung Electronics did not come up with a separate position on this day. As in 4 years ago when Vice Chairman Lee was first arrested, it is expected that the future will be operated by professional managers by affiliates rather than the group-level emergency management system. At the time, Samsung dismantled the Future Strategy Office, which served as the group’s control tower, and coordinated the current issues by creating a business support task force (TF) for each of its three affiliates, including electronics, life, and trade.
However, the analysis is that the aftermath of this’no owner’ will be bigger than four years ago. KAIST Professor Lee Byung-tae said, “It is a much more difficult time now than at the time.” “The digital economy has advanced more than 10 years due to the aftermath of the novel coronavirus infection (Corona 19), and China’s willingness to’semiconductor independence’ is strong due to the trade conflict between the US and China. At this time, the owner’s restraint, who has to make heavy decisions, can hurt the company.”
Securing new growth engines can also be disrupted. From February 2017, when Vice Chairman Lee was under arrest, to February of the following year, large investments at Samsung Electronics were’all-stop’. It was the last time that Vice Chairman Lee acquired Harman, an American electronic parts company, in November 2016, three months before his arrest. Again, it is said that the 133 trillion won investment plan for the system semiconductor business, led by Vice Chairman Lee, may creak.
Seoul National University Business School Professor Lee Kyung-mook said, “The arrest of Lee Vice-Chairman will inevitably delay large-scale mergers and acquisitions or investment-related decisions that must be made at the general level. It is welcome in places competing with Samsung Electronics such as TSMC in Taiwan.” .
Foreign media such as Bloomberg, Nihon Gayizai, and Reuters predicted that Samsung Electronics could face difficulties due to the absence of the total number while struggling with rivals. On this day, the share price of Samsung Electronics ended at 85,000 won, down 3.41%. In a day, the market cap evaporated by 18 trillion won.
Reporters Park Hyung-su, Choi Hyun-ju, and Kwon Yu-jin [email protected]