"No Holiday Business Trips"‥Lee Jae-yong's First Management Move of the New Year Likely to Extend Beyond This Month

Samsung Electronics Chairman Lee Jae-yong is entering the courthouse on the 11th to attend the continuation of the second trial related to Samsung's unfair merger charges held at the Seoul High Court.

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Every year at the start of the new year, Samsung Electronics Chairman Lee Jae-yong has carried out on-site management activities during the Lunar New Year holidays and other occasions. However, this year, it is expected that he will delay this timing somewhat. With the sentencing for the appeal trial regarding the 'unfair merger and accounting fraud' case scheduled for early next month, Chairman Lee is likely to quietly focus on managing business affairs domestically.

According to the business community on the 20th, Chairman Lee has recently been concentrating on new year management plans by closely reviewing the company's performance in his office at the Seoul Seocho headquarters. Rather than engaging in external activities, he is reported to have chosen to focus on inspecting the internal organization and system operations of the company, which faced significant business difficulties last year, and strengthening its fundamentals.

Although more than 20 days have passed since the new year began, Chairman Lee has yet to make any notable public appearances. Except for attending the 'Economic Community New Year Meeting' held at the Korea Chamber of Commerce and Industry building in Jung-gu, Seoul, on the 3rd, he has shown little external activity. This is considered somewhat unusual compared to earlier this year when he visited Samsung Global Research to check on the development status of 6G technology and future business strategies.

The prevailing analysis is that Chairman Lee's subdued approach is largely influenced by the semiconductor business crisis and the upcoming sentencing for the 'unfair merger and accounting fraud' appeal trial scheduled for early next month. He is awaiting the appeal verdict at the Seoul High Court Criminal Division 13 (Presiding Judge Baek Gang-jin). He was prosecuted on charges including manipulating stock prices to strengthen management succession and Samsung Group's control through the 2015 merger of Cheil Industries and Samsung C&T (violations of the Capital Markets Act), and involvement in accounting fraud at Samsung BioLogics, a subsidiary of Cheil Industries (violations of the External Audit Act). In the first trial, he was acquitted of all 19 charges, leading to optimistic expectations from the legal and business communities regarding the second trial. However, since verdicts can be overturned at any time in the second trial, it is too early to be complacent. Under these circumstances, Chairman Lee appears to have judged that engaging in public activities would not be beneficial for public opinion or the trial.

As a result, it is reported that Chairman Lee will also skip the on-site management visits during the holidays, which he has never missed annually. Since he began leading Samsung in earnest in 2014, he has encouraged employees working away from their families overseas during holidays and directly inspected local businesses and markets. During last year's Lunar New Year holiday, he visited the Samsung SDI Battery Plant 1 production site and the construction site of Plant 2 in Seremban, Malaysia. He also gauged local market reactions in Kuala Lumpur, Malaysia's largest city, and held a meeting attended by about 20 Samsung affiliates' expatriates. Earlier, during the 2022 Chuseok holiday, he visited Mexico (electronics and home appliances factory, engineering and refinery construction site) and Panama (electronics sales corporation), and during the 2023 Chuseok holiday, he toured Israel (electronics R&D center), Egypt (electronics TV and tablet factory), and Saudi Arabia (Mulsan Neom City underground tunnel construction site).

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