Arrest and Surgery... Samsung's Gloomy 83rd Anniversary (Update)

2017 Imprisonment Anniversary
Lee Jae-yong's Hospitalization Deepens the Slump

[Asia Economy Reporters Hyewon Kim, Heungsun Kim] Samsung Group marked its 83rd anniversary amid the absence of its chairman. This is the second time Samsung has celebrated its founding anniversary while Vice Chairman Lee Jae-yong is in custody, the first being in 2017. There was no letter from prison. Moreover, considering various circumstances such as Vice Chairman Lee undergoing emergency surgery for appendicitis and being hospitalized for four days, the anniversary was observed quietly without any separate events.

Since the dissolution of the Future Strategy Office in February 2017, Samsung has omitted group-level founding anniversary events. Samsung's founding date was originally based on March 1, 1938, when the late founder Lee Byung-chul started his business in Daegu and established Samsung Sanghoe (now Samsung C&T). However, on March 22, 1988, the late Chairman Lee Kun-hee declared a "second founding" on the 50th anniversary, changing the anniversary date to this day.

This year, the anniversary was marked amid the absence of the chairman, Vice Chairman Lee. Earlier, in January, Lee was sentenced to two and a half years in prison and detained following the retrial of the political scandal case. This year, especially with Lee hospitalized, the internal atmosphere was subdued on the anniversary.

At least one week for recovery
Trial schedule on the 25th also disrupted

According to the Ministry of Justice and medical sources, Vice Chairman Lee was transferred from Seoul Detention Center to Samsung Medical Center on the 19th due to appendicitis and underwent emergency surgery. On the same afternoon, he experienced abdominal pain and received basic examinations at the detention center but was judged to have simple abdominal pain and did not go to the hospital despite the detention center's recommendation. It is said that he wanted to avoid special treatment and public attention or misunderstandings related to external medical care, stating he would monitor the situation through the weekend. Currently, he is reported to be recovering stably after surgery.

With Vice Chairman Lee undergoing emergency surgery, the trial scheduled for the 25th is expected to face disruptions. According to legal circles, the first trial date for Lee and Samsung officials, indicted on charges including unfair trading and market manipulation under the Capital Markets Act, is scheduled for the 25th at the Seoul Central District Court Criminal Division 25-2. Unlike preparatory hearings, the formal trial requires the defendant's attendance, but Lee is unable to attend due to his illness. Medical experts generally expect about one week for recovery after appendicitis surgery, but since Lee's appendix ruptured and foreign substances spread to the peritoneum, the recovery period may be longer. If Lee cannot attend, the trial may proceed with only the other Samsung officials present or the trial date may be postponed.

The "judicial risk" surrounding Vice Chairman Lee and Samsung appears to be entering a prolonged phase again. The legal judgment on allegations of unfair mergers and accounting fraud is just beginning and is expected to take at least five years, according to legal circles. Counting from the November 2016 search of Samsung Electronics headquarters by prosecutors related to the political scandal case, Samsung has been entangled in judicial risks for at least ten years. The business community refers to this as "Samsung's lost decade."

Samsung's legal counsel argues regarding the merger between Samsung C&T and Cheil Industries, stating, "The merger was decided considering business needs, responses to regulatory environment changes, group governance improvement, and management stability, and was not pursued solely for succession or strengthening control." They also claim that the merger ratio and timing were not disadvantageous to Samsung C&T shareholders when viewed in light of business conditions and stock price trends, asserting innocence.

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