Samsung Electronics Co. Chairman Lee Jae-yong (Yonhap)
SEOUL, Feb. 5 (Korea Bizwire) – Samsung Electronics Co. Chairman Lee Jae-yong on Monday was acquitted of any wrongdoing in a controversial 2015 merger case, a decision expected to strengthen his leadership to overcome mounting challenges and accelerate decision-making within South Korea’s largest conglomerate.
Earlier in the day, a Seoul court cleared Lee of charges of stock price rigging, breach of trust and accounting fraud in connection with the controversial merger of Cheil Industries Inc. and Samsung C&T Corp. which was seen as aimed at solidifying his managerial control of the group at a lower cost.
The long-awaited acquittal marks the resolution of legal uncertainties that Lee has faced for nine years since he was involved in a nationwide power abuse scandal under the administration of former President Park Geun-hye, providing stability to Samsung.
Despite the potential for an appeal by the prosecution, Lee can now concentrate on the tech giant’s business and management as a court-approved chairman, at least for the time being.
This development is seen as crucial for Samsung in the face of geopolitical risks, such as the U.S.-China conflict and the prolonged Russia-Ukraine war, along with a protracted economic slowdown, high inflation and interest rates.
Lee is expected to play a pivotal role in addressing challenges in the semiconductor and smartphone businesses amid heightened competition in the tech industry.
Last year, Samsung lost the top spot in semiconductor vendor revenue to Intel Corp. and came in second closely behind Apple Inc. in smartphone shipments.
With the clearance, Lee is expected to take a more decisive leadership role to help his company regain the No. 1 status in the flagship semiconductor and smartphone businesses.
Its semiconductor business posted an operating loss of 14.88 trillion won (US$11.2 billion) for last year alone due to waning demand.
Samsung Electronics Co.’s HQ (Yonhap)
Despite profit in its DRAM business in the fourth quarter, it was not enough to bring the entire chipmaking business back to profitability.
In his final statement in a November court hearing, Lee stressed his company is in massive headwinds and needs strong leadership to overcome them.
Analysts anticipated Lee will navigate the challenges through mergers and acquisitions (M&As) and massive investments that may have been delayed due to the legal proceedings.
Samsung’s subdued presence in the global M&A market is also expected to change under Lee’s strengthened leadership.
The company’s last major M&A deal was in 2016, when it took over automotive and audio firm Harman International for $8 billion.
As he announced a 240 trillion-won investment program in 2021 when he was released on parole, Lee will likely come up with another massive investment plan in the near future. He also made such a decision in 2018 after being released on a suspended sentence.
(Yonhap)
