Paroled Samsung chief not entirely free for full-fledged management or of court woes

Samsung Group’s de facto leader and Samsung Electronics Co. Vice Chairman Jay Y. Lee finally becomes freed on Friday from confinement since January, but his full-fledged return to management to navigate the defending champion of chips and smartphones against multiple challenges at home and abroad remains uncertain due to restrictions to business return on a paroled status.

Investors were equally wary, with Samsung Electronics shares finished down a tad – 1.6 percent – at 80,200 won on Tuesday despite the overnight announcement.

Samsung Group’s flagships are immediately readying briefing to their chief upon release from jail as they are in a hurry to respond to a myriad of developments at home and abroad during his absence.

A seismic change is in progress on the chip landscape with the U.S. Intel returning to chipmaking in full force on the back of ambitious backing of the U.S. government hoping to leverage on rebuilding of chip industry to prevail over the tech hegemonic fight with China and pure-play founder TSMC galloping away in the foundry market on explosive demand for consignment chips.

Samsung Electronics in May pledged 171 trillion won ($149.1 billion) investment in system semiconductor sector to achieve leadership in foundry by 2030, but no action plans have followed. Its separate commitment of $17 billion to expand its chip facility in Austin or build a new foundry in Taylor, both in Texas, also remains in the air.

The device solution unit under Samsung Electronics has completed review of the plans in the first half but needs a go-ahead from their chief.

Lee also would have to devote attention to upscaling fifth-generation (5G) telecommunications equipment and smartphone businesses that have failed to gain steam during the Huawei debacle and instead are experiencing production setback due to chip supply shortage and prolonged Covid-19.

The M&A activity hiatus by the country’s top company with over 209 trillion won in its cash hoard also is expected to pick up.

Biopower, which has the state support to fight Covid-19 and future virus risk, also needs the leader’s decision to add impetus in the momentum of Samsung Biologics’ fill and finish manufacturing for Moderna’s Covid-19 vaccine from September.

Lee, however, is chained by parole restrictions and other ongoing trials.

Under the sentence of retrial in January for bribing former impeached President Park Geun-hye, he would be restricted from leaving the country or business employment for five years. He needs a separate special presidential pardon and justice minister’s endorsement for business return.

In theory, Lee could go on with everyday work as an unregistered board member.

SK Group Chey Tae-won was also an unregistered executive and he joined work without pay after being convicted of embezzlement. He returned as registered executive in 2016 after special pardon.

Business community however is pitching for a special pardon to demand a symbolic and full-fledged devotion from Lee and Samsung.

The plea will be made when heads of five business organizations meet with deputy prime minister for economy Hong Nam-ki on Wednesday.

Lee still would not be entirely out of the woods. He faces other court battles from the trial related to illicit merger for his hereditary succession this week to one on alleged abuse of propofol sedative next week.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]