Samsung puts break on introduction of holding company

Park Sae-jin Reporter Posted : 2017-04-27 10:54 Updated : 2017-04-27 10:54
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[Photo by Yoo Dae-gil = dbeorlf123@ajunews.com]


With its jailed de facto leader on trial, Samsung Electronics put the break on the idea of revamping the structure of corporate governance to introduce a system controlled by a holding company.

The tech giant said its board agreed not to push for a structural change after concluding that a holding company would not contribute to strengthening its business competitiveness.

The decision reflects Samsung's determination to stick to its current business portfolio at a time when vice chairman Jay Y. Lee is on trial for providing bribes in an attempt to facilitate the succession of group leadership from his bedridden father.

Lee was arrested in February for donating cash to entities controlled by the crony of ex-president Park Geun-hye. Prosecutors said that at Park's request, Lee pledged some 43.3 billion won (38 million US dollars) in kickbacks in return for preferential treatment from the Fair Trade Commission, an anti-trust watchdog.

The country's largest family-run conglomerate announced an overhaul of its entangled group structure ruled by one man to enhance transparency in management and decision-making as Lee's arrest sent its global brand image nosediving.

The revamp focused on disbanding the future strategy office, a group-wide control tower which has been used by Samsung leaders to facilitate their handy control across the sprawling business empire for decades. But doubt has been raised among market watchers over how Samsung would coordinate crucial group-wide affairs such as the transfer of leadership.

Lim Chang-won = cwlim34@ajunews.com