Samsung Electronics Vice Chairman Lee Jae-yong is heading to court on the afternoon of the afternoon of the 18th, attending a hearing for the revocation of the case of’Gukjeong Nongdan’ held at the Seoul High Court in Seocho-gu, Seoul. The first criminal division of the Seoul High Court sentenced Vice-Chairman Lee, who was charged with bribery and other charges, to two years and six months in prison. Vice-Chairman Lee, who was being tried in a state of disability, was issued a warrant on that day and was arrested in court. yunhap news
Concerns came into reality. Regarding the worst case scenario of arresting headquarter, Samsung was in shock. On the 18th, when Samsung Electronics vice chairman Lee Jae-yong was sentenced to two years and six months, the official position was omitted, but a somber atmosphere was detected everywhere. An executive at Samsung said, “It wasn’t until the end came,” and expressed regret for Lee’s arrest. Samsung’s “absence of the total number” has been three years since it was released due to probation in February 2018.
From the beginning of the year, the’New Samsung Boat’, which departed mainly from Vice Chairman Lee, is drifting. This is because after the death of Chairman Lee Kun-hee last year, he lost his center of gravity due to the arrest of Vice-Chairman Lee, who became the general leader.
Samsung Electronics Vice Chairman Lee Jae-yong’s case log
According to Samsung and others on the 18th, disruptions in mid- to long-term management strategies such as large-scale new investments are inevitable right away. A Samsung official said, “It’s terrible” about the arrest of Vice Chairman Lee 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 must enter into emergency management with the total number absent until July 2022, but the future is uncertain.
As Vice Chairman Lee is imprisoned again, Samsung is bound to put a brake on the owner-centered’aggressive management move’. Although Samsung Electronics performed well in the semiconductor and smartphone fields last year due to an increase in non-face-to-face (untact) demand, it was the third highest in sales (236 trillion 260 billion won), but it is not competing in the global information technology (IT) market Is fierce. In the field of TVs and smartphones, China’s pace of pursuit is already significant. Above all, it is the most painful thing for Samsung that it has not yet secured a definite future food other than home appliances and semiconductors. It is in this context that Vice Chairman Lee visited Samsung Research, which is researching next-generation technologies such as artificial intelligence (AI) and 6th generation (6G) communication technology from the beginning of the new year and emphasized that “securing future technologies is a matter of survival.”
Of course, as the absence of the owner prolonged, 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 it is unlikely that Samsung will fall into a crisis right away.”
However, it is a public opinion inside and outside the business world that the absence of an owner will inevitably act as the biggest obstacle to the group’s management. A business official said, “The biggest challenge for New Samsung is to prepare for the semiconductor economy decline and to grow food for the future. It is difficult to pursue drastic mergers and acquisitions (M&A) and restructuring without the head of Samsung, which can face a crisis.” Pointed out. In fact, after Vice Chairman Lee came to the front in 2014, 14 M&As took place before he was arrested in February 2016, but after that, there were virtually no meaningful M&As. This is in contrast to the actions of rivals such as SK Hynix and Nvidia and AMD in the US are growing in size through aggressive M&A.
In addition, Samsung, a global company, is also burdened with a smudged external image in that the owner was overthrown on bribery charges and was imprisoned again. Some have already raised concerns that Samsung Electronics may be attacked by global hedge funds because of the increased uncertainty of Samsung due to this incident.
For the time being, Vice Chairman Lee is inevitable for’in-house management’ as he was imprisoned in 2017-18. However, considering that Vice Chairman Lee’s role has been in direct contact with major overseas clients and leading major decisions such as M&A, there is inevitably a limit to in-house management.
Kim Dong-wook reporter [email protected]
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