Daunting challenges ahead for Samsung Electronics' chief even as legal woes end

Samsung's Lee Jae-yong was acquitted of legal charges, allowing him to refocus on corporate strategy and leadership, amid rising competition and pressing challenges in the tech sector.

Samsung Electronics Executive Chairman Lee Jae-yong arrives at the Seoul High Court in Seocho District, southern Seoul, on Feb. 3. [AP/YONHAP]

Korea’s Supreme Court acquitted Lee Jae-yong, executive chairman of Samsung Electronics, in the final trial over alleged accounting fraud and stock manipulation tied to the 2015 merger of Samsung C&T and Cheil Industries, as well as the accounting practices of Samsung Biologics on Thursday.

The ruling closes the book on more than eight years of courtroom battles that have dogged the heir to Korea’s largest conglomerate since the 2016 presidential influence-peddling scandal.

A legal marathon ends, but the real race begins The Supreme Court’s third division upheld the lower court’s not guilty verdict, wiping away the last judicial hurdle facing Lee. In a statement, Lee’s legal team said the ruling “clearly confirms the legitimacy of the Samsung C&T merger and Samsung Biologics’ accounting practices,” adding that they were “deeply grateful to the court for its wise judgment following five years of thorough deliberation.” Samsung Electronics declined to issue a separate statement.

Lee appeared in court for 102 out of 113 hearings, or 90.2 percent of all trial sessions. According to Samsung officials, he was present unless circumstances made it absolutely impossible, such as overseas visits. Still, insiders within the firm and industry say the prolonged trial undermined Lee’s global profile and weakened his international business network.

The legal saga sidelined Lee at key moments. He skipped a 2016 meeting with then-President-elect Donald Trump, an absence that insiders say undercut Samsung’s international ties.

Samsung Electronics' office in Seocho District, southern Seoul, is pictured on July 17. [NEWS1]

While Lee fought his legal battles, Samsung’s once-untouchable chip division stumbled. SK hynix overtook Samsung in high bandwidth memory (HBM) chips, critical for powering the AI boom, while Taiwan’s TSMC widened its dominance in the global foundry market, holding a 67.6 percent share compared to Samsung’s 7.7 percent.

Choi June-sun, a professor emeritus at Sungkyunkwan University Law School, lamented that “no other country in the world subjects its business leaders to legal risk for over eight years.” He added that the case involved decisions that “virtually all accounting experts deemed legitimate.”

The squeeze is on in the consumer electronics industry as well. Apple, LG Electronics and aggressive Chinese brands are battering Samsung’s smartphone and appliance businesses. Critics argue the tech giant has so far failed to fully capitalize on the AI wave reshaping the industry.

The return of 'Do-or-die' Lee

Now free of legal burdens, expectations are rising for a reinvigorated leadership role from Lee. Mergers and acquisitions are expected to be a top priority, especially as several key deals have already resumed since Lee was acquitted in the appeals court earlier this year.

In May, Samsung acquired the U.S. audio unit of Masimo through its subsidiary, Harman, for $350 million, and bought the German HVAC company FlaktGroup for 1.5 billion euros (approximately $1.7 billion). It also recently acquired the U.S. digital health care company Zelis.

Lee’s mantra — “technology, technology and more technology” — is poised for a comeback. In February, his long-dormant Samsung study group came roaring back to life after a three-year hiatus.

The sign for the Sun Valley Resort stands at the entrance ahead of the Allen and Company Sun Valley Media and Technology Conference in Sun Valley, Idaho, on July 7, 2025. [REUTERS]

The executive has also resumed an active international travel schedule. Earlier this month, Lee attended the Sun Valley Conference — a secretive annual gathering of business titans that he described as “the most important and demanding trip of the year.” In February, shortly after the appeals court ruling, Lee met with OpenAI CEO Sam Altman and SoftBank founder Masayoshi Son to discuss potential investments in AI.

Inside Samsung, there’s speculation Lee will soon address employees, following his March call for sajeuksaeng — life-and-death resolve.

Calls for a new command center

The vacuum left by the disbanding of Samsung’s Future Strategy Office, the group’s former top policymaking body, in the wake of the 2016 scandal continues to be felt. While Samsung Group operates business support task forces across its main subsidiaries, insiders say they lack the influence and coordination power of their predecessor. Late last year, Samsung Global Research launched a new management diagnosis office, which is seen as inheriting some of the oversight functions of the old corporate audit team. Two high-ranking government officials, including a former presidential secretary and an ambassador-at-large, recently joined the think tank.

Samsung Electronics Executive Chairman Lee Jae-yong attends a meeting between President Lee Jae Myung and six major business groups and corporate leaders at the presidential office in Yongsan, central Seoul, on June 13. [JOINT PRESS CORPS]

Chin Dae-je, former minister of science and ICT and a former Samsung Electronics president, said the company’s decline was inevitable while Lee was distracted by legal troubles.

“In Chairman Lee Kun-hee’s time, when a crisis struck, he would call executives day or night without warning. That sense of tension kept the entire organization on edge and performing,” he said. “That kind of top-down urgency is what Samsung needs now.”

Seoul National University business professor Lee Kyung-mook, co-author of "The Samsung Way" (2013), noted that a culture of risk avoidance took hold during the trial period.

“People became more focused on not doing anything that could draw criticism or controversy. That killed the company’s ‘do-or-die’ spirit.” He added that reviving a culture of urgency and an intense work ethic is now the most critical task for Samsung.

The business community welcomed Thursday’s ruling. The Korea Chamber of Commerce and Industry said the verdict was expected to “ease management uncertainty and have positive ripple effects across the Korean economy.” The Korea Enterprises Federation said it hoped Samsung would now “strengthen its global leadership through bold leadership.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY KIM SU-MIN [kim.juyeon2@joongang.co.kr]