[New Samsung] ① JY Shakes Off Judicial Risks, Expands His Stride

Planning Future Steps for Commuting to Seocho Headquarters
Overseas Management Expected to Start from Lunar New Year Holiday

Lee Jae-yong, Chairman of Samsung Electronics, who has shaken off a long-standing 'judicial risk,' has announced an aggressive course of action.

According to the business community on the 6th, Lee reportedly went to the Seocho building, where his office is located, in the morning to plan his future moves. There is speculation that he might travel abroad during the upcoming Lunar New Year holiday. This suggests that he could expand his previously domestic-focused activities. A business insider said, "It would not be surprising no matter what steps Chairman Lee takes at this time."

Key Highlights of Samsung Electronics Chairman Lee Jae-yong's On-site Management During the Holiday. Graphic by Kim Chaeryeong

With No More Trial Variables, Lee Jae-yong Likely to Broaden His Scope

The acquittal not only improves Chairman Lee's external image but also significantly broadens his range of activities. Until now, Lee found it difficult to schedule overseas business trips due to court hearings twice a week. To compete with global companies rivaling Samsung, he needed to visit international markets, see things firsthand, and meet key figures to explore new opportunities, but he was unable to do so properly.

Earlier this year, Lee conducted his schedule solely within South Korea. He did not attend the International Consumer Electronics Show (CES 2024) held in Las Vegas, USA, from January 7 to 10, nor the World Economic Forum (Davos Forum) held in Davos, Switzerland, from January 15 to 19. Instead, on January 10, he visited Samsung Research in Umyeon-dong, Seocho-gu, Seoul, to review trends and countermeasures in next-generation communication technologies, including 6G. Then, on January 16, he held a meeting with 15 '2024 Samsung Masters' at the Seocho building to communicate with them.

Expectations for Lee's overseas trips are gaining momentum as they coincide with the upcoming Lunar New Year holiday. Previously, he had to obtain court permission for every overseas trip, but this holiday period frees him from such restrictions. At least until the prosecution files an appeal, he can travel abroad freely. Since the Lunar New Year holiday in 2014, when he traveled to the U.S. to discuss cooperation plans with local telecom executives, Lee has devoted himself to on-site management without taking breaks during holiday periods for 10 years. Last Chuseok, he visited and inspected electronics and trading business sites in Saudi Arabia, Egypt, and Israel.

Expectations for Accelerated Large-Scale M&A and New Technology Investments

Overseas trips are likely to lead to large-scale investments and major mergers and acquisitions (M&A). Industry experts believe that Samsung Electronics must make generous investments to secure a technological edge in future growth areas such as artificial intelligence (AI), 6th generation mobile communications (6G), and biotechnology, beyond semiconductors. At Samsung Research, which he visited as his first move of the new year, Chairman Lee emphasized, "Our survival and future depend on securing new technologies," adding, "In difficult times, proactive R&D and unwavering investment are necessary."

Previously, after becoming vice chairman in 2012 and before the 2016 political scandal, Lee focused on expanding new businesses through M&A. 'SmartThings,' established through acquisitions of related companies in 2014 as a hub for Samsung's device ecosystem, is a representative M&A success. 'Harman,' a Samsung Electronics subsidiary that has recently achieved results in the automotive electronics sector, was acquired by Samsung Electronics in 2016 for $8 billion. Samsung Pay, the mobile payment system, secured its foundational technology when Samsung Electronics acquired U.S. mobile payment solution company LoopPay in 2015. Samsung's AI assistant 'Bixby' was also launched after Samsung Electronics acquired related companies in 2016 to secure the underlying technology.

Attention is also focused on whether large-scale investment plans will be announced. Shortly after his release on parole, in August 2021, Lee announced a massive investment plan to inject 240 trillion won over the next three years. Market voices are growing louder that Samsung Electronics must achieve results not only in semiconductors but also in AI, robotics, 6G, biotechnology, and automotive electronics. As of the end of the fourth quarter last year, Samsung Electronics held 92.42 trillion won in cash and cash equivalents.

Samsung Electronics Chairman Lee Jae-yong is leaving the courtroom after being acquitted in the first trial verdict on accounting fraud and unfair merger charges at the Seoul Central District Court in Seocho-gu, Seoul, on the 5th. Photo by Kang Jin-hyung aymsdream@

Acceleration of Responsible Management... ‘JY Board’ Expected to Be Completed at the General Meeting

With Lee shaking off judicial risks, attention is also focused on whether he will return as a registered director at the shareholders' meeting scheduled for next month. Returning as a registered director would publicly demonstrate his commitment to responsible management and could accelerate the completion of the 'Lee Jae-yong Board,' marking a step toward the 'New Samsung.'

Although Lee was promoted to chairman on October 27, 2022, he remains an unregistered executive. He was appointed as an inside director through an extraordinary shareholders' meeting on October 27, 2016. However, after becoming embroiled in the political scandal and facing judicial risks, he decided not to renew his term as an inside director. Since his term expired on October 26, 2019, he has maintained his status as an unregistered executive.

The biggest difference between a registered director and an unregistered executive is participation in the board of directors, which discusses key company decisions. Registered directors are members of the board, while unregistered executives are not. They are also excluded from penalties under laws such as the Serious Accidents Punishment Act. This has led to criticism that family members of the group who are unregistered executives have authority but no responsibility. In the business community, there are calls for Lee to become a registered director to actively manage by making decisions on large-scale M&A and investments and taking responsibility.

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