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Samsung chief heads to Middle East after cleared of merger case charges

Lee Jae-yong expected to inspect local operations, boost employee morale during Lunar New Year’s holidays

Feb. 7, 2024 - 15:09 By Jo He-rim
Samsung Electronics Chairman Lee Jae-yong appears at Seoul Gimpo Business Aviation Center to depart for the United Arab Emirates on Wednesday.

Samsung Electronics Chairman Lee Jae-yong took off on a business trip to the Middle East and Southeast Asia shortly following Monday’s court ruling that cleared him of stock manipulation charges in a high-profile 2015 merger deal.

According to industry sources on Wednesday, Lee took off to the United Arab Emirates on a private jet on Tuesday to inspect local operations and meet partners there. He is also expected to visit Southeast Asia, including Malaysia, to meet with employees and boost their morale over the Lunar New Year’s holiday that starts Friday.

Lee’s overseas trip comes a day after a Seoul court handed down a ruling that found him not guilty on all charges filed, including stock manipulation and accounting fraud, related to the controversial merger between two Samsung affiliates, Cheil Industries and Samsung C&T Corp. The trial began in September 2020.

As the court ruling cleared away legal disputes at least for now, industry watchers expect Lee to play a more active role in the tech giant's management.

"As the trial that has been going on for some nine years (including another trial related to a 2016 influence-peddling scandal) is wrapping up, chances are higher for Lee to actively take part in the group's management," said Kim Dong-won, a researcher at KB Securities. "It is likely that the conglomerate will proceed with faster decision-making processes on issues including mergers and acquisitions and new investments."

Since the case was brought to the court in 2020, there have been 106 hearings, and Lee attended 95 of them, missing only in exceptional cases including when he was on a presidential trip. Before this case, he had served jail terms for his involvement in the political scandal that led to the 2017 impeachment and removal from office of former President Park Geun-hye.

"They should let Lee focus on work. The industries are dependent on him," an industry official said under condition of anonymity.

According to sources, prosecutors are highly likely to file an appeal this week. If they file an appeal and the case goes to the upper court, legal experts say the dispute could take as long as another six to seven years to resolve.

Setting aside the possibility of the legal crisis prolonging, Lee has a long list of daunting tasks to handle as Samsung, the country's top conglomerate, struggles to maintain its position in the global market.

In the 2023 fiscal year, Samsung posted 6.56 trillion won ($4.95 billion) in operating profit, down 84.9 percent from a year earlier. In its key semiconductors business, the company logged a loss of 15 trillion won, down by 37.5 percent, giving way for runner-up Intel to top the global market.

Samsung was also beaten by its archrival Apple in terms of smartphone shipments last year after maintaining the world’s largest smartphone maker title for 13 years.

The duration of Lee's trip has not been made public. Kim Won-kyong, the executive vice president leading the Global Public Affairs Office at Samsung, was seen accompanying the chairman at the Seoul Gimpo Business Aviation Center on Tuesday.