Samsung Electronics Vice Chairman Lee Jae-yong is attending the retrial sentencing hearing of the state affairs manipulation case at the Seoul High Court in Seocho-gu, Seoul on the 18th. Photo by Hyunmin Kim kimhyun81@
[Asia Economy Reporter Kiho Sung] The business community has collectively expressed both regret and concern over Samsung Electronics Vice Chairman Lee Jae-yong being sentenced to 2 years and 6 months in prison and detained in court following the retrial of the national corruption scandal. They also pointed out that there should be policy and administrative considerations at the government level to minimize disruptions to Samsung Group's management.
On the 18th, the Korea Employers Federation (KEF) released a statement immediately after Vice Chairman Lee's trial, saying, "The business community is very concerned about the realization of a management vacuum at Samsung Group due to the recent prison sentence."
The KEF also noted, "Given the recent economic damage caused by the novel coronavirus infection (COVID-19) and the acceleration of economic policies centered on protecting domestic industries by countries around the world, economic uncertainty is greater than ever," adding, "It is expected that the delay in major business decisions and investments due to the management vacuum at a global company representing our country will inevitably have adverse effects on the overall economy and industry."
They continued, "To prepare for the intensified global competition in the upcoming post-COVID era, it is crucial for our global companies to actively expand their businesses and innovate technologies to secure competitive advantages in new industrial sectors," and "We urge the government to provide policy and administrative considerations to minimize disruptions to Samsung Group's management going forward."
The Federation of Korean Industries (FKI) also expressed in a commentary, "Vice Chairman Lee has played a role in supporting the Korean economy by leading bold investments and job creation amid the COVID-19 economic crisis, so we deeply regret the court's detention ruling."
They added, "Considering Samsung's share in the Korean economy and its status as a global company, there are concerns that the contraction of Samsung's management activities due to this ruling may adversely affect not only the individual company but also the entire Korean economy," and "A prolonged leadership vacuum could delay entry into new businesses and swift decision-making, resulting in falling behind in global competition. We sincerely hope Samsung wisely overcomes this crisis and continues on the path of sustainable growth."
The Korea Chamber of Commerce and Industry (KCCI) also expressed concerns that the trial outcome of Vice Chairman Lee could hinder the growth of the Korean economy.
Lee Kyung-sang, head of the Economic Research Department at KCCI, said, "Vice Chairman Lee's prison sentence raises concerns about disruptions in the role of Samsung Electronics, a representative Korean company, in the growth of new businesses during the paradigm shift in the Korean economy's industries."
Earlier, the court stated, "While the sincerity of the defendant and Samsung can be positively evaluated, it was concluded that the conditions for sentencing mitigation are difficult to meet in this case," and "Considering all these circumstances, a prison sentence and detention of defendant Lee Jae-yong are inevitable."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
