In August 2017, Li Zairong was sentenced to 5 years in prison for the crime of corruption. Now, he's back to the list of Samsung heirs. Samsung's most famous subsidiary, Samsung Electronics, achieved record revenue in 2017. As vice chairman of the Samsung Group, Li Zairong's main duty is to make a long-term decision.
Yu Yongchang, a business professor at Hanyang University in Seoul, said that Li Zairong had great influence on Samsung's acquisitions, subsidiaries' sales and major reorganization. He will make important and long-term decisions for Samsung's future in Gyu-Chang Yu. Although some Samsung subsidiary companies are booming even without Li Zairong supervision, most of them lack the support of Li Zairong's energetic innovative mentality.
Samsung may have more mergers and acquisitions
Although Samsung has achieved record profits in 2017, the company is facing a series of challenges, especially in Samsung Electronics. In 2017, chip manufacturing promoted its sales growth, but experts warned that the "rocking Qian Shu" would soon dry up.
In addition, in the next few years, other lower cost companies will catch up, and Samsung will no longer dominate the semiconductor industry. "This is a huge risk for the SamSung group and the future of the Korean economy," said Park Sang-in, a professor at the Graduate School of public administration, Seoul National University.
Even without Mr Lee's oversight, Samsung has naturally been involved in strategic planning. But Tom Kang, director of mobile device research at Counterpoint Research, an analysis firm, says this is done on an individual company basis. Samsung Electronics' mindset in Silicon Valley has become the norm, especially innovative.
Li Zairong has proved himself to be good at dealing with these long-term strategic issues. He set the tone for the whole group, and unlike in the past, Samsung should be involved in mergers and acquisitions and cooperating with other companies. In the typical Korean conglomerate, the company will only use other products produced by other Affiliated Companies. This is also the reason why Samsung Galaxy Note 7 has been on fire and exploded, because it uses internal products rather than seeking better and non explosive components from other companies.
For example, Li led the acquisition of Harman, a car audio company in November 2016, and the $8 billion acquisition is the largest in Samsung's history. Since then, Samsung has expressed its willingness to buy more cars, digital health and commercial software Domain company. Last December, Young Sohn, Chief Strategic Officer and chief executive of Samsung Electronics, said the company "is committed to making M & A as a tool."
Since Samsung Electronics Chief Executive Officer Kwon Oh-Hyun announced his retirement, he has been stepping down his leadership in recent months. Yu Yongchang, a business professor at Seoul's Hanyang University, said it was a sign. Mark Newman, an analyst at Sanford C. Bernstein, also said: "Samsung is more likely to do something bigger after Mr Lee returns."
Less reliance on "known winners", such as memory chips, and more emphasis on new technology concepts, such as mobility and preventive health, is what Li Zairong is good at.
Keep the distance from politics
Although Li Zairong has global knowledge and innovative thinking, he has been accused of supporting the ancient practices of Korean corporate culture, the government. He was involved in a large-scale scandal, and even led to the impeachment and imprisonment of Park Geun-hye, who had spent nearly a year in prison in last year.
Last August, Li Zairong was convicted of a bribe of $6 million 380 thousand to obtain government approval for the merger of two Samsung Affiliated Companies. The money was used for the horsemanship training for the daughter of Park Geun hye's close friend, and two of them had been imprisoned.
Yonhap reported recently that the lower court ruled Li Zairong was guilty of 5 accusations and sentenced him to 5 years' imprisonment last year, which is a typical example of the struggle between politics and capital power. Li Zairong's legal team appealed the decision. The court of Appeal ruled this week, and took different strategies on the issue, and blamed the responsibility on Park Geun hye and his close friends.
The crime of bribery of equestrian training still exists, but Li Zairong denies all charges and is trying to overthrow the lower court's verdict. When he left the court on Monday, he said, "I apologize for disappointing everyone. The past year is enough for me to finish my life, and I will be more cautious and better. "
Li Zairong's five - year sentence has been reduced to two and a half years and has been served in the next four years. The ruling shocked the whole Republic of Korea, especially for those activists who think Samsung, LG, Lotte and other business groups need more stringent supervision. They condemned these companies at the expense of the Korean public interest.
Li Zairong's father had received two presidential pardon for his involvement in the scandal, not much different from the leaders of other Korean conglomerates. Conservatives believe that most of the leaders of enterprise groups are founders of their founders. They should not be imprisoned or fined for making mistakes, because the national economy needs them. These big conglomerates have greatly affected South Korea's economy, and Samsung's assets are equivalent to 42% of the country's GDP.
The curious question is whether Mr Lee will soften his leadership so that he acts more in line with the reformers' wishes. Tom Kang, an analyst at Counterpoint Research, believes that this is inevitable, just because the new president, Moon Jae-inin, believes in liberalism.
The administration usually sets the tone for the business environment of the country, even for a few years under his or her leadership. Tom Conn points out that because President Donald Trumphas embraced isolationist policies, More and more U.S. companies are investing in the United States, he said. "during Mr Wen's administration, Lee is likely to be more inclined to make business decisions. I think this applies to anyone doing business in South Korea."
Otherwise, experts cannot predict how life in prison has changed Lee's leadership style. "he may be more cautious in dealing with the government," Tom Kang said. Because Samsung is using their intelligence to figure out who should lobby, their lobbying policy may change, and Mr Lee may keep his distance from politics. "