Smooth Sailing at LG Electronics Shareholders' Meeting... No Clues on Smartphone Business Direction

LG Electronics' Shareholders Meeting Ends in About 20 Minutes on the 24th
President Kwon Bong-seok and MC Business Division Head Lee Yeon-mo Absent
No Shareholders' Questions on Management Status

[Image source=Yonhap News]

[Asia Economy Reporter Cha Min-young] The LG Electronics shareholders' meeting, which was expected to provide clues about the direction of the smartphone business, ended anticlimactically on the 24th. Internal confusion grew amid rumors of difficulties in selling the Mobile Communications (MC) Business Division, but the company has consistently maintained a cautious stance for two months, stating that "nothing has been decided." This reflects the company's concerns over coordinating the sale and issues such as personnel reallocation.

On the morning of the same day, LG Electronics held its 19th regular shareholders' meeting at the LG Twin Towers in Yeouido, Seoul, and passed all the proposed agendas within about 20 minutes. Only the chairman, CFO Vice President Bae Doo-yong, attended, while LG Electronics President Kwon Bong-seok and MC Business Division Head Lee Yeon-mo did not appear at the meeting. There were no questions from shareholders.

Since January 20, when LG Electronics CEO Kwon Bong-seok officially announced a business review by saying "all possibilities are open," the company has not released any statements for over two months. LG Electronics is expected to formalize its direction, such as sale or withdrawal, as early as the end of this month and hold briefing sessions for employees. Subsequently, a board meeting is anticipated on the 5th of next month to make an official resolution.

So far, LG Electronics has negotiated with Vietnam's Vingroup and others for the sale of its smartphone business, but the negotiations reportedly broke down due to price differences. As the sale process has not progressed, there is growing speculation that LG Electronics will ultimately pursue a complete withdrawal from the smartphone business.

The market views the possibility of maintaining the MC Business Division as slim, given the cumulative losses exceeding 5 trillion won over 23 quarters. In the audit report disclosed on the 4th, LG Electronics acknowledged, "Despite strenuous efforts such as launching innovative products to improve the smartphone business structure, meaningful sales growth and profitability improvement were not achieved." The development of the 'Rainbow' project, announced as a strategic product for the first half of the year, and the next form factor 'Rollable' have effectively been halted.

Currently, LG Electronics is internally discussing the reallocation of related personnel. Personnel reallocation is likely to proceed immediately after the business policy is finalized at the April board meeting and shared within the company. Approximately 3,700 employees belonging to the existing MC Business Division will be reassigned within the first half of this year to other business divisions or affiliates such as LG Uplus, LG Energy Solution, and LG Magna e-Powertrain, which is scheduled to launch in July. In this process, LG Electronics is expected to internalize patents related to the smartphone business and seek synergy with future businesses.

An LG Electronics official said, "Nothing has been decided yet. We are reviewing all possibilities with an open mind."

At the shareholders' meeting, LG Electronics proposed and approved a plan for a physical division to establish LG Magna e-Powertrain, a new corporation responsible for the electric vehicle business. After approval procedures for the joint venture, LG Magna is scheduled to launch in July.

Meanwhile, with the LG Electronics shareholders' meeting passing without any surprises, expectations for the ㈜LG shareholders' meeting scheduled two days later on the 26th have also diminished. The ㈜LG shareholders' meeting is scheduled for the 26th. Koo Kwang-mo, the head of LG Group, is registered as the CEO of ㈜LG.

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