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Samsung Vice Chairman Lee Jae-yong on his way to a meeting at a production plant with other key executives in Hwaseong, Gyeonggi Province, on June 1.
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Electronics giant magnifies Lee’s media presence ahead of Supreme Court decision
Just three days away from the 26th anniversary of Samsung Electronics Chairman Lee Kun-hee’s monumental declaration of a new style of management, several of Vice Chairman Lee Jae-yong’s key aides are likely to be detained or questioned in connection with an investigation into accounting fraud at Samsung BioLogics. On June 1, Lee took the unusual step of giving the press information about a meeting of presidents at electronics-related affiliates, in which he underlined the group’s large-scale investment. These circumstances are leading some to say that Samsung is mobilizing the group’s resources to bring Lee into the public eye. It’s becoming more likely that Samsung will find itself in the unprecedented position of having four of its vice presidents, several of whom work for Samsung Electronics’ powerful business support task force, in jail. On June 4, the Seoul Central District Court will be reviewing the prosecutors’ request for arrest warrants for two vice presidents at the group, one of whom is surnamed Lee, in charge of Samsung Electronics’ finance team. Two vice presidents with the Samsung Electronics business support task force, which took over for Samsung’s shuttered Future Strategy Office, have already been arrested on charges of destroying evidence in the investigation of Samsung BioLogics. Task force team leader Jung Hyun-ho, who is one of Lee Jae-yong’s closest aides, is also expected to be called in for questioning this week. The next question revolves around the head of the finance team, also surnamed Lee. Lee’s career took off when he was working for the finance team in the restructuring headquarters that served as the group’s “control tower” when Chairman Lee Kun-hee was at the helm; after that, he was named an executive at the Future Strategy Office, where he came to be regarded as the group’s finance guru. Along with destroying evidence, prosecutors believe that the man was involved in the group’s top-secret Aurora Project, which is linked to purchasing shares in Samsung Bioepis. The arrest of the finance director is likely to draw the net of the investigation even tighter around Vice Chairman Lee Jae-yong. The Supreme Court is also expected to make its decision this month on a case involving Lee Jae-yong’s efforts to facilitate his inheritance of management control over the group. The ongoing investigation is not the only source of uncertainty for Samsung. Even as memory semiconductors, a key business for Samsung Electronics, are continuing to lose ground worldwide, the US-China trade dispute is increasing uncertainty as well. Some think that Samsung will benefit indirectly from Chinese losses, but others remain skeptical. Another challenge is the Trump administration’s policy of expanding tariffs, including an upcoming tariff on Mexican imports. The strategy adopted by Samsung is to put Lee Jae-yong front and center. A press release issued last month reported that Lee had visited Japan’s two largest mobile service providers, while the first press release this month disclosed what was discussed during a meeting between Lee and the presidents of group affiliates. This was part of a trend in which press releases are increasingly headlined by Lee, especially compared to last year. Last month, Samsung Electronics’ public relations team took the unusual step of asking the press not to go overboard in its coverage of the prosecutors’ investigation. “With the pressure from the investigation heating up, Samsung appears to have settled on the tactic of highlighting its ability to make large investments and create new jobs amid an economic crisis, as well as its leader, Lee Jae-yong,” said one executive in the business community. The ruling party has been playing along with Samsung, with President Moon Jae-in joining Lee on a visit to the company’s Hwaseong facility, which some think has had an impact on Samsung’s behavior. Despite the pending investigation, a source at Samsung Electronics said, “Lee Jae-yong is going about his normal management activity, seeking ways to keep the economy humming in the future.” By Song Gyung-hwa, staff reporter Please direct comments or questions to [english@hani.co.kr]
