Seoul 12 August : Samsung’s vice chairman Lee Jae Yoon was granted a presidential pardon Friday in an action widely believed to help consolidate his position and speed up the process of business decisions in the country’s largest conglomerate.The decision is made at a time when the tech giant is confronted with growing competition from smaller competitors such as those in China and the increasing economic uncertainty due to global inflation, tightening of monetary policy and concerns about a slowdown in economic growth.
A little earlier in the day President Yoon Suk Suk-yeol had approved his first pardons special for Lee, Lotte Group Chairman Shin Dong-bin, and 1,691 others to mark the occasion of the August.15 Liberation Day anniversary.Yoon declared that the pardon was intended to aid the country “overcome the financial crisis.”
Samsung heir Lee was sentenced to two and a half years in prison in the case of bribery involving former President Park Geun-hye .He was granted parole in August last year.The prison term was officially over on July 29, however he still requires an amnesty to have all his rights restored according to Yonhap news agency.
“I am extremely grateful that I have another chance to begin afresh,” Lee said in an announcement shortly when the decision to pardon was made.
“I will do my best to fulfill my responsibilities as a businessman and contribute to create more jobs for the young,” he added.
Lee’s supporters had requested that the government grant him pardon to ensure he could take over his position in full freedom as CEO of Samsung Electronics, the crown jewel of the company and the world’s biggest mobile phone and memory chip maker.
Lee’s “absence,” they argued could impact the overall performance of the firm, which is the leading contributor to Asia’s fourth-largest economy, and at a moment where the global competition over manufacturing of chips has grown more intense and the shortage of chip components has hindered the production of automobiles as well as consumer electronics.
After the pardon, Lee is likely to assume a more authoritative leadership role.
Like many tech companies in the world, Samsung is facing economic challenges from fears of global recession and high inflation, which has slowed the purchasing power of consumers.
The semiconductor industry has been showing indications of getting to its peak after two and a half years of rapid growth that was fueled by pandemics.
Samsung shares have fallen over 23 percent since beginning of this year, well from the KOSPI market’s decrease of 15 percent.
Recently, Samsung is stepping up its efforts to establish networks and meet with key partners and clients, including ASML which is one of Samsung’s most important chip-making partners.ASML is the sole manufacturer of the extreme ultraviolet (EUV) system for lithography that are essential for making advanced chips.
Samsung has also been seeking prospective M&A targets in many different kinds of industries including chips.Senior executives have mentioned several times throughout the months that an agreement could occur sooner rather than later.
In the course of this year’s announcement, Samsung announced a massive investment plan for the next five years, in particular to sharpen its competitiveness in the chip industry.
The tech giant announced that it would invest around 450 trillion won (US$355 billion) in semiconductors and biopharmaceuticals in the course of five years.80 percent of which will be used to research and development as well as developing talents in South Korea, especially in advanced chipmaking.
“I believe that the pardon will allow the company to make long-term and major business decisions with more confidence and make better decisions, such as possible M&As and investments.” Greg Roh, head of technology research at HMC Investment & Securities, said.
Market watchers believe they believe Lee might be promoted in the coming year, to the chairmanship of Samsung Electronics, a post that was left vacant since the death of his father Lee Kun-hee died in October of 2020.
Lee was the junior Lee was appointed vice president post in December of 2012.
However, in the eyes of activists who advocate for better corporate governance Friday’s pardon is another instance of the country’s tolerance towards business tycoons that have been convicted of white-colored crimes.
His father was found guilty of tax evasion and embezzlement but was granted an official pardon in December 2009 in the name of “national interest.”
“We are adamant about the Yoon government’s’selective justice’ with leniency toward chaebol leaders,” said People’s Solidarity for Participatory Democracy which is one of the most active civic organizations.
Lee’s legal battle isn’t over.He has been in another trial over the 2015 merger of two Samsung affiliates as well as alleged fraudulent accounting at the pharmaceutical division Samsung Biologics.
The merger and the fraud are widely regarded as crucial steps to increase his influence over the group.
na/
