November 26, 2024

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Samsung Electronics Chairman Lee Jae-yong attends the final hearing of a retrial in Seoul High Court in Seoul on Monday. (Newsis)

Entangled in court trials for nearly a decade, Samsung Electronics Chairman Lee Jae-yong appealed for leniency during the final hearing of a retrial, publicly acknowledging for the first time the challenges his company is facing.

Delivering his final statement during the retrial's final hearing on allegations including stock manipulation related to a controversial 2015 merger, Lee pledged to do everything he can for the company to overcome its current challenges.

“I am well aware of the mounting concerns surrounding Samsung’s future. Some worry it is facing a fundamental crisis and fear it might be different from the challenges we have faced before. Others offer encouragement, saying Samsung will overcome the difficulties," Lee said, addressing the judges.

"Hearing these concerns and words of support, I am reminded once again of the immense expectations people have for Samsung."

As the country's largest conglomerate faces a number of challenges such as poor earnings, labor union conflicts and technological setbacks, the Samsung chief acknowledged the company's struggles and appealed to the court for an opportunity to lead its recovery.

"The challenges we face today are tougher than ever, but we will persevere, overcome them and move forward," Lee said.

"I will do everything I can for Samsung to continue earning the public's love and trust. I sincerely ask for the opportunity to fully focus on fulfilling my responsibilities."

Lee has been attending court hearings since 2016 when he was indicted on multiple charges including bribery and tax evasion, linked to the corruption scandal involving then-President Park Geun-hye.

For this case related to the high-profile merger of two Samsung affiliates Samsung C&T and Cheil Industries, Lee has been accused of rigging the company valuation and falsifying accounting records to strengthen his control over the business empire at a lower cost.

The lower court acquitted Lee of all of the 19 charges the prosecution proposed in February. The prosecutors, however, appealed and requested the same punishment of five years in prison and a fine of 500 million won ($356,000) for Lee during the retrial on Monday.

Samsung Electronics, which is the world's leading smartphone and advanced chip maker, has been grappling with poor earnings amid a severe downturn in the chip market.

After reporting impressive operating profits of 51 trillion won ($36.5 billion) in 2021 and 43 trillion won in 2022, the company's earnings plunged to 6.5 trillion won last year.

Even though the chip market has been recovering, the outlook for this year remains bleak as the company continues to lag behind its smaller rival SK hynix in the lucrative and rapidly growing AI chip market.

The tech giant is also struggling with its stagnant stock price, which peaked at 100,000 won a few years ago and has since dropped by nearly half.

Industry observers say Lee's ongoing legal risks are delaying the company from making bold investments and necessary decisions.

For the merger case alone, Lee has attended about 100 court hearings since October 2020.

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