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The Korea Herald
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THE INVESTOR
April 15, 2024

Market Now

Samsung chief's return to board pushed back as trial continues

  • PUBLISHED :February 21, 2024 - 09:09
  • UPDATED :February 21, 2024 - 09:41
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Samsung Chairman Lee Jae-yong attends a verdict hearing held at Seoul Central District Court on Feb. 5. (Yonhap)

More than a year has passed since Samsung Electronics Chairman Lee Jae-yong ascended to the company's top seat in 2022, but his board membership continues to hang in the balance amid an ongoing legal dispute.

Samsung Electronics held a board of directors meeting Tuesday and fixed the date of the upcoming general shareholders meetings for March 20. During the meeting, the members also appointed Shin Je-yoon, former Financial Services Commission chairman, and Cho Hye-kyung, an applied artificial intelligence professor at Hansung University, as new outside directors.

The two director nominees are to succeed the posts from Kim Seon-wook, a professor emeritus at Ewha Womans University, and Kim Jong-hun, founder of the tech firm Kiswe Mobile. Their tenures will each last for three years.

While it was highly anticipated that Lee would regain board membership in the wake of a recent court ruling clearing him of all charges, including charges of stock price rigging in relation to a controversial merger of two Samsung companies, the matter has been left out of the discussion.

Lee's membership is widely seen as a symbolic step to take on more responsibility in management. Among the chiefs of the four top conglomerates in Korea, Lee is the only one who is not a board member of his company.

Earlier this month, the Seoul Central District Court acquitted Lee of charges including stock manipulation linked to the controversial merger of Cheil Industries and Samsung C&T, in 2015.

But the trial will continue as the prosecutors filed an appeal against the ruling, insisting that the merger was aimed at strengthening Lee's control over the conglomerate group at a lower cost.

“Even though Lee was acquitted of all charges in the first verdict trial, Samsung would want to keep a low profile as prosecutors filed an appeal and the trial is set to continue,” an industry official said on condition of anonymity.

“Lee is carrying out all business activities and is the chairman, so it would not be such a big problem that he is not a board member.”

Lee Chan-hee, Chairman of Samsung Group's independent corporate compliance oversight committee, enters Samsung Life Insurance office building in Seoul to attend the first meeting of the committee this year on Tuesday. (Yonhap)

On the same day, Samsung’s Compliance Committee kicked off its third term, holding its first regular meeting.

Lee Chan-hee has been reappointed to lead the committee for the second consecutive term, along with other members. Han Sung-hwan, the president of Samsung Life Public Welfare Foundation, joined as a new member.

All eyes are on the committee as Lee Chan-hee has stressed the need for Samsung to set up a control tower overseeing its sprawling businesses across different industries.

“The country’s economy can develop when Samsung is not absorbed in domestic competition, and when it becomes a global corporate (player). To achieve this goal, there needs to be a control tower playing the role of the captain,” Lee told reporters last year.

His comments came as Samsung disbanded its Corporate Strategy Office, better known as the Future Strategy Office, in February 2017, following its alleged connection to a high-profile corruption scandal that led to the impeachment of former President Park Geun-hye.

As part of efforts to enhance transparency in its management activities, the ethics committee was established in 2020 to consist of outside experts. It acts as an advisory council without legally binding power.

By Jo He-rim (herim@heraldcorp.com)

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