Lee Jae-yong, Whose Arrest Warrant Was Dismissed, Likely to Launch Aggressive Management Moves

[Asia Economy Reporter Changhwan Lee] With the court's dismissal of the prosecution's arrest warrant for Samsung Electronics Vice Chairman Lee Jae-yong, the burden on Lee's company management has also been eased. Although he has not completely escaped judicial risks, it is expected that he will focus on restoring Samsung Electronics' large-scale investments and social trust, which he has pledged so far.

At around 2 a.m. on the 9th, Judge Won Jeong-sook, in charge of warrants at the Seoul Central District Court, dismissed the arrest warrants for Vice Chairman Lee, former Samsung Future Strategy Office Chief Choi Ji-sung (Vice Chairman), and former Future Strategy Office Strategy Team Leader Kim Jong-jung (President). Judge Won stated, "There is insufficient evidence to justify the necessity and appropriateness of detaining the suspects, contrary to the principle of non-custodial trials."

Judge Won added, "The basic facts have been established, and it appears that the prosecution has already secured a considerable amount of evidence through its investigation. Considering the importance of this case, it is reasonable to determine the suspects' responsibility and its extent through sufficient debate and examination during the trial process."

The Seoul Central District Prosecutors' Office expressed regret immediately after all arrest warrants were dismissed, stating, "Considering the seriousness of this matter and the evidence secured so far, we regret the court's decision to dismiss the warrants."

Samsung's legal team stated, "The court's reason for dismissal was that, aside from the basic facts, the suspects' responsibility and criminal charges were not sufficiently proven, and there was no necessity for detention." They added, "We hope that through a strict review process in the prosecution's investigation review procedure, the continuation of the investigation and the decision on prosecution will be determined."

In the business community, it is believed that although Vice Chairman Lee has not completely escaped judicial risks, he will continue his aggressive management approach that he has pledged so far. Lee has repeatedly promised bold challenges and investments in new businesses.

After his release in February 2018, Lee announced a large-scale investment plan worth 180 trillion won in August, six months later, focusing on key businesses such as artificial intelligence (AI), 5G, bio, semiconductors, and automotive components. In April last year, he declared the long-term plan "Semiconductor 2030" vision to invest 133 trillion won by 2030 to become the number one in system semiconductors.

At a public apology press conference on the 6th of last month, he declared, "While focusing on the areas we do best, we will boldly challenge new businesses."

Since then, he has said, "There is no future if we are held back by the past or complacent in the present. We must proactively prepare for massive changes to create new growth engines" (May 18, business trip to semiconductor plant in Xi'an, China), and "We must not stop future investments especially in difficult times" (May 21, announcement of Pyeongtaek EUV foundry investment).

The background of Vice Chairman Lee's aggressive management declaration is closely related to the increasingly fierce global IT industry situation.

In fact, overseas companies such as Apple and Amazon are taking advantage of the economic crisis as an opportunity and are showing aggressive management moves, including M&A. Jeff Bezos, CEO of Amazon in the U.S., recently invested $15 million in Beacon, a UK freight transport startup. Apple also acquired three startups in early April.

Experts believe that as many companies face financial difficulties due to the COVID-19 pandemic and their company values decline, global IT companies see the current time as an opportune moment for M&A.

On the other hand, Samsung Electronics has not conducted any large-scale M&A since acquiring the U.S. automotive electronics (automotive components) company Harman in 2016. The halt in Samsung Electronics' large-scale M&A since 2017 is evaluated to be due to the absence of the head of the group after Vice Chairman Lee was detained in connection with the 'state affairs manipulation' case, making it difficult to make large-scale investment decisions.

A semiconductor industry insider analyzed, "Investing hundreds of trillions of won determines the survival of a company, and if it is not the owner, no one can bear the risk. If Vice Chairman Lee cannot manage, the investment itself may be canceled."

This content was produced with the assistance of AI translation services.