Is Samsung going to the dogs?

It sure looks like it if we are to look at recent reports on Korea’s largest conglomerate, Samsung Group. The company is in crisis, no thanks to the ongoing probe on corruption, which began in January this year.

So far, a special counsel has already questioned top execs, including Samsung’s Chairman Lee Kun-hee’s son Lee Jae-yong, Vice-Chairman Lee Hak-soo and President Kim In-joo. It will just be a matter of time before the company’s head honcho himself, Lee Kun-hee, is summoned.

Samsung headquarters in Taepyongro, Seoul. The pic was taken on
the day it was raided in Jan 2008.

Some of the “inconveniences” the company is facing during the investigation into alleged slush fund creation, mass bribery and other illegalities include:

Grounded: Top execs are not allowed to leave the country, forcing them to cancel meetings with business partners abroad.

Uncertain future: Samsung is losing out on investment opportunities because its execs are unable to make decisions since the fate of the company is in the air.

A senior Samsung Electronics exec said: “We haven’t reached a final decision yet on how much we should invest this year because we can’t make concrete plans. If we miss the investment chance, we’ll lose our competitiveness.”

Tainted reputation: Business partners are cautious when dealing with Samsung. 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.”

Left behind: You snooze, you lose. A senior Samsung Group exec expressed his concern of being left behind in the rapidly-growing electronics sector saying, “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.”

Source & Pic credit: Digital Chosunilbo

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