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Samsung Electronics Vice President Lee Jae-yong leaves the Seoul Detention Center in Uiwang, Gyeonggi Province on Feb. 5. (Hankyoreh Archive)
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The Samsung Electronics vice president seems unlikely to return to management in the near future
Samsung Electronics vice president Lee Jae-yong continues to stay out of the public eye one month after being released from prison on Feb. 5 with a suspended sentence. With many South Koreans holding a dim view of the suspended sentence and new Samsung bribery allegations emerging in connection with former President Lee Myung-bak, some business analysts are predicting Lee is unlikely to return to management in the near future. Since his release, Lee had refrained from venturing out publicly apart from visits to his hospitalized father Lee Kun-hee. Some had predicted he might attend a Samsung Electronics board meeting on Feb. 23 and the groundbreaking ceremony for a semiconductor plant in Hwaseong, but he failed to attend either. Lee did reportedly have lunch with Samsung Electronics Advanced Institute of Technology head Kwon Oh-hyun after a board meeting last month. Lee has kept a low enough profile for the Samsung Electronics PR team to state that it was “not confirmed whether he is reporting to work.” His behavior is being seen as a reflection of his personal dislike for appearing publicly – so much so that he would often travel in the past unaccompanied by other staff. According to sources, Lee has recently been traveling with only one accompanying staff member. Lee also faces an unfavorable climate. The Samsung Group has recently been under investigation by prosecutors over allegations that it paid billions of won in overseas litigation costs on behalf of DAS, a company believed to have been owned by former President Lee Myung-bak. Public opinion on Lee Jae-yong’s suspended sentence remains negative, with a Hangil Research survey showing 56.5% of respondents feeling he “got off lightly.” The outlook for his third trial also appears ominous after the court hearing the Choi Soon-sil case handed down a 20-year sentence against her in mid-February, ruling Samsung to have delivered 7.3 billion won (US$6.8 million) in bribes to her – twice as much as the 3.6 billion won (US$3.35 million) recognized by the court in Lee’s second trial. Lee has recently been focusing his energies on the upcoming third trial, appointing former Supreme Court Justice Cha Han-sung as part of his legal team. A changing of the guard at Samsung affiliates Another factor that may keep Lee from venturing out publicly for now is the so-called “Lee Jae-yong battle line” put in place at Samsung affiliates with a late 2017 and early 2018 reshuffling. With Samsung Electronics chairman Choi Gee-sung and other “Lee Kun-hee men” stepping down as a matter of course after the disbanding of the Future Strategy Office (FSO), a changing of the generational guard has taken place at major Samsung affiliates. In late 2017, Samsung Electronics replaced its three sector chiefs who were all in their 60s, as Kwon Oh-hyun, Yoon Boo-keun, and Shin Jong-kyun were forced to make way for a new set of presidents in their 50s: Kim Ki-nam, Kim Hyun-seok, and Koh Dong-jin. Former Samsung C&T president Choi Chi-hun, Samsung Life president Kim Chang-soon, and Samsung Securities president Yoon Yong-am also retreated to secondary roles. Instead, new task forces have been created to assume the FSO’s functions as the group’s former control tower, with former FSO staffers assigned roles on the new teams. The Samsung Electronics project support task force has been placed under former FSO personnel support team director Jung Hyun-ho, while the director for Samsung Life’s financial competitiveness improvement task force – which oversees financial affiliates – is executive director Yu Ho-seok, also formerly with the FSO. Samsung C&T’s EPC competitiveness improvement task force, which oversees non-electronics affiliates, has been entrusted to another FSO figure, Samsung Engineering corporate management support vice president Kim Myeong-soo. “With these ‘mini-FSOs’ staffed with former FSO figures in their fifties, Lee has put together a ‘new Lee Jae-yong system,’” an industry source said. Many are now watching to see whether Lee’s return to management comes at a general shareholders’ meeting scheduled for Mar. 23. By then it will have been nearly 50 days since his release, and the new directors will be taking their first appearance. A Samsung Electronics source said it was “not confirmed” whether Lee would be attending. By Choi Hyun-june, staff reporter Please direct questions or comments to [english@hani.co.kr]
