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Samsung Electronics Chairman Lee Jae-yong delivered a message of determination to overcome the crisis in court for the first time since rumors of the company's crisis emerged. At a critical time when a turning point is needed for the company's major businesses, including semiconductors, he expressed his resolve both internally and externally to focus on resolving company risks if he can shake off his personal legal risks. Samsung Electronics is expected to announce executive personnel changes as early as the 27th, drawing attention to whether it will show a willingness to renew personnel by replacing those responsible for key areas such as the semiconductor business, where the crisis was triggered.

Samsung Electronics Chairman Lee Jae-yong is entering the Seoul High Court building on the 25th to attend the appellate trial's final hearing regarding the allegations of unfair merger between Samsung C&T and Cheil Industries. Photo by Heo Young-han

According to the business and legal circles on the 26th, Chairman Lee, during his final statement at the second trial sentencing hearing of the ‘unfair merger and accounting fraud’ case held by the 13th Criminal Division of the Seoul High Court the previous day, said, "I am well aware that concerns about Samsung's future have recently grown very large," and added, "The reality we face is more challenging than ever, but we will definitely overcome these difficulties and move forward one step further."

Chairman Lee read his prepared statement clearly for about 5 to 6 minutes. He said, "While preparing my final statement, I recalled the time when the first trial verdict was delivered earlier this year," and added, "Although I was acquitted after a long trial of over three years, I felt a much heavier sense of responsibility rather than relief." He continued, "Receiving affectionate criticism and encouragement directed at Samsung and me, I deeply reaffirmed my new determination for company management," and stated, "I met various entrepreneurs and experts not only domestically but also around the world to hear diverse voices, and I contemplated Samsung's future while communicating with many executives and employees working on the ground both at home and abroad."

Chairman Lee reflected, "The ongoing appeal trial was a precious time to once again look back on myself and company management and to reflect," and said, "I spent a lot of time blaming myself, wondering if I had failed to meet the high expectations of the public for Samsung." He emphasized that the merger between Cheil Industries and Samsung C&T, which was the issue in the case, was a process carried out for the benefit of the company, not for personal gain. He said, "When I was informed about the merger promotion, I believed it would clearly help the future of the two companies," and stressed, "There was absolutely no intention to harm shareholders or deceive investors for personal profit." He appealed, "Nevertheless, any misunderstandings were due to my shortcomings and negligence," and added, "If there are mistakes that must be held accountable under the strict standards of the law, I will bear the responsibility, and I ask for leniency for the other defendants who have devoted their lives to the company." Lastly, he requested the court, "I will do everything to transform Samsung into a company loved by the public. Please allow me the opportunity to focus on my mission."

As Chairman Lee acknowledged the company's crisis through his message, attention is focused on the upcoming regular personnel reshuffle. According to business circles, Samsung Electronics will announce executive personnel changes as early as the 27th. It is expected that the company will show a willingness to renew personnel by replacing those responsible for key areas such as the semiconductor business, where the crisis was triggered. There is also attention on whether there will be changes in the role of the business support task force (TF) led by Vice Chairman Chung Hyun-ho.

In particular, the whereabouts of executives who led the memory semiconductor sector are of great interest. Market analyses have repeatedly pointed out that the crisis in the business was triggered due to losses in the memory market, including high-bandwidth memory (HBM), leading to calls for personnel measures related to those involved. Vice Chairman Jeon Young-hyun, who was appointed in a one-point personnel move this year as head of the Device Solutions (DS) division, is expected to retain his position, while the futures of Lee Jung-bae, President of the Memory Business Division, Choi Si-young, head of the Foundry Business Division, and Park Yong-in, head of the System LSI Business Division, are uncertain. Decisions regarding presidents whose terms as inside directors are about to expire are also considered an important variable that will influence the direction of personnel changes. No Tae-moon, head of the Mobile Experience (MX) Business Division, Park Hak-gyu, head of the Management Support Office, and Lee Jung-bae, head of the Memory Business Division, will have their inside director terms expire in March next year.