Samsung halts planning for 2020 amid legal risks

No one is sure who the top brass of Samsung Electronics will be next year as the company is silent about its annual organizational reshuffle amid ongoing multiple trials involving key executives, according to industry sources Thursday.

The South Korean tech giant usually appoints its top executives in early December and personnel shake-up across all affiliates by mid-December.

But this year, neither its leadership nor its business divisions have made personnel announcements, making it harder for industry watchers to make reliable forecasts about Koreas’ biggest conglomerate’s operations next year.

The chief speculation is that this could be due to the lingering legal risks stemming from the ongoing trials involving the de facto Samsung leader Lee Jae-yong and over 30 executive members.

Samsung heir Lee was in a courtroom last Friday for the third retrial on his sentence for convicted charges of bribery involving former President Park Geun-hye by the Supreme Court in August.

It is likely that a final verdict on his sentence would be issued before or after the general election slated for April.

Until then, the Samsung leader would have to bear the burden of not being able to pay undivided attention to spearheading his group.

Along with Lee, around 30 executives are also involved in disgraceful corporate scandals.

Three executive vice presidents were imprisoned on Monday on charges of attempts to eliminate evidence that supports the prosecutors’ claim that links an accounting fraud at Samsung BioLogics with Lee’s leadership inheritance scheme.

Some 15 current Samsung executives are to stand before the court Friday and next Tuesday on charges of disrupting employees’ efforts to create labor unions at former Samsung Everland and Samsung Electronics Service.

“The executives facing the trials are subject to the upcoming organizational reshuffle,” said an official. “It would be hard to ignore the legal issues for each of them as they are currently heading major teams or groups.”

Some industry officials speculate that Samsung would be preparing for a larger-than-expected reform, including strengthening the group’s compliance unit as a judge had ordered Lee to do so.

“Lee will need to show he is at least making efforts to renew the organization somehow to avoid imprisonment,” an industry official said.

While the three chief executives of Samsung’s business divisions -- Device Solutions CEO Kim Ki-nam, IT & Mobile Communications CEO Koh Dong-jin and Consumer Electronics CEO Kim Hyun-suk -- are predicted to retain their positions, bigger-than-expected changes could be made to the organizational structure of each division, some observers say.

By Song Su-hyun (song@heraldcorp.com)