One and a half years after the release from prison of Samsung Electronics Vice Chairman Lee Jae-Yong, Samsung Group faces another year of uncertainty following Thursday’s Supreme Court decision to retry Lee’s bribery case.
The decision of the court brings another obstacle to Korea’s biggest conglomerate, which is fighting down working earnings in the midst of dropping DRAM rates, fresh Japanese trade laws, and a slowing Chinese economy as a result of a trade war with the US.
The retrial of Lee is a big concern for the community. Depending on its outcome, Lee could return to jail, and without a top decision-maker, Samsung might have to go on. From February 2017 to February 2018, Lee spent a year in prison when he has released thanks to a tribunal of appeals that reduced his term.
“The feeling of uncertainty experienced among insiders in the business is serious,” said a source from Samsung Electronics who asked for anonymity.
“Technology of information and communication is a quickly changing sector,” he proceeded. “Missing the correct investment and decision-making timing can in no moment force the business down the ranks.”
Another source from Samsung stated the business is under “the triple threat of bad performance outcomes, Japan’s trade limitations, and the U.S.-China trade conflict.” In the first quarter of this year, sales from Samsung Electronics dropped 9% to 108 trillion won ($89 billion) and working income plummeted 58 % to 12 trillion won.
In spite of Japan’s fresh constraints, the firm is currently trying to obtain key components to create semiconductors. With ties between Korea and Japan deteriorating, there is no knowledge of which products can be exported.
“Global competitors, including Chinese companies, are warm on Samsung’s heels, yet[ Samsung] subsidiaries and the morale of staff have fallen short of top management,” another anonymous Samsung Electronics source said.
Beginning with the corruption scandal in 2017, lawyers researched Samsung on a multitude of problems ranging from an accounting scandal to allegations that Samsung had incorrectly disbanded its unions.
During that time, attorneys raided Samsung headquarters 27 times with warrants and charges were filed against 31 managers. Samsung insiders argue that top managers and business employees have a chilling impact on choices, making it difficult to resolve the crisis.