Samsung Group to reshuffle management this week

Samsung Electronics' Seocho office in Seoul. / Korea Times file

By Baek Byung-yeul

Samsung Life Insurance CEO Hyun Sung-chul.

Samsung Group is expected to reshuffle the management of its affiliates this week, an industry source said Sunday. The move has been delayed for than a month due to a court hearing involving the group's ownership heir Lee Jae-yong.

On Jan.16, the country's top business enterprise notified executives of certain affiliates that their contracts were not going to be renewed, the source said. Given this is the usual preliminary procedure before the group announces promotions, the source said it indicated that a reshuffle was imminent.

Samsung has traditionally carried out an annual reshuffle of executives in the first week of December, but failed to do so in 2019. Industry officials said this was because Samsung leader Lee was facing a new hearing for his alleged involvement in the massive corruption scandal that unseated former President Park Geun-hye.

A Samsung official refused to give details of the personnel reshuffle, but said the group would announce the leadership changes as early as this week.

“The group is likely to conduct the management reshuffle as early as this week, before the start of Seollal, the Lunar New Year, but we cannot confirm the details at present,” the official said.

Samsung Card CEO Won Gee-chan.

Samsung has been severely criticized for being involved in various scandals including accusations of bribing political figures and sabotaging union activities. The conglomerate has been working on improving its transparency.

Early this month, Samsung launched a compliance committee that will monitor law observance. Headed by former Supreme Court Justice Kim Ji-hyung, the seven-member committee has been guaranteed authority and autonomy and will look into any issues inside the group ranging from corruption, unfair trading and labor problems to even the management succession.

After the committee was established, chief executives of Samsung Electronics signed an agreement to comply with laws and company principles and report breaches of the law to it.

Given Samsung's changing scope of operations, the reshuffle was expected to focus on a generational shift and replacing people in key posts under its reward and punishment system. However, due to the on-going hearings involving Lee and other executives, and business uncertainties stemming from a trade war between the U.S. and China, Samsung is expected to choose stability and continuity rather than make drastic changes.

Against this backdrop, key positions at Samsung Electronics, the group's core affiliate and the world's largest electronics maker, will likely remain unchanged. They are Kim Ki-nam, vice chairman and CEO of the memory chip business; Kim Hyun-suk, president and CEO of consumer electronics; and Koh Dong-jin, president and CEO of mobile products.

However, a shift is expected to occur at financial affiliates, with local media reporting that Samsung Life Insurance CEO Hyun Sung-chul and Samsung Card CEO Won Gee-chan have decided to retire.

After reshuffling the top posts, Samsung Group is expected to announce further personnel changes among lower level executives, and an organization restructuring plan.

Also, the group needs to name a board chairman to replace Lee Sang-hoon, who was sentenced to 18 months in prison in December 2019 for breaching union-related laws while working as chief financial officer at Samsung Electronics.