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The Samsung Group is in crisis. A special counsel has already questioned top executives including Samsung chairman Lee Kun-hee¡¯s son Lee Jae-yong, vice chairman Lee Hak-soo, and president Kim In-joo, and it is now only a matter of time before Lee Kun-hee himself is summoned. The conglomerate is apparently in management trouble, and there are signs that Samsung Electronics may be left out in the cold by its Japanese rivals.
"We're not exaggerating our hardship,¡± a senior Samsung executive said recently. ¡°There really is a management crisis. The special counsel probe may be necessary. But it's also necessary to minimize damage to our own management. We're really at a loss."
Korea¡¯s biggest conglomerate is feeling the chill in various ways. First of all, top executives have been banned from overseas travel, which makes negotiations with business partners abroad difficult. Due to travel bans, such top executives as Samsung Electronics semiconductor chief Hang Chang-kyu and LSI president Kwon Oh-hyun had to cancel meetings with important overseas business partners early this year.
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Samsung headquarters in Taepyongro, Seoul on the day in January when it was raided by corruption probe.
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Worries that Samsung is losing investment opportunities have also reached serious proportions. Top Samsung executives can't make timely decisions. A senior Samsung Electronics executive said, "We haven't reached a final decision yet on how much we should invest this year, because we can't make a concrete plan. If we miss the investment chance, we'll lose our competitiveness."
A plan to invest W2.9 trillion (US$1=W939) in an LCD 8-2 production line has not yet been finalized because the board of directors has postponed its session. Samsung SDI had intended to make a final decision on its second-phase investment plan for active matrix organic light emitting diode (AMOLED) in January, but has made no progress. "Due to travel bans on our company executives, we haven't conducted negotiations with our business partner in Japan,¡± a Samsung SDI official said,
An official with a Samsung affiliate said, "We can now do nothing where in the past we could have made rapid progress with the name Samsung alone. Many of our business partners are assessing our management situation or checking progress in the special counsel investigation."
A senior Samsung Group executive said, "Rapid changes are occurring in key sectors, such as semiconductors, mobile phones and displays. But it's hard for us to respond quickly in the current circumstances. Even after the special counsel probe comes to an end, it will take a lot of time to recoup lost opportunities."
(englishnews@chosun.com )
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