Convicted Samsung Vice Chairman Jae Y. Lee, will on Monday, receive a presidential pardon that will enable him to once again, take part in decision-making of the electronic company.
Lee was convicted in 2017 for gross graft practices which included an attempt to bribe former South Korean president Park Geun-hye to win government support for his succession. He was paroled a year ago after serving 18 months in jail.
The pardon by South Korean President Yoon Suk Yeol will erase the 54-year-old executive’s criminal record, allowing him to join Samsung board, travel overseas for deals, and help to accelerate decision-making for the company, which has been impacted by global demand and supply shocks.
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“In a bid to overcome the economic crisis by vitalizing the economy, Samsung Electronics Vice Chairman Lee Jae-yong, whose suspended prison term was ended recently, will be reinstated,” the Korean government said in a joint statement from its ministries.
Samsung businesses, both chip-making and smartphones, took a hit following Lee’s exit. The company has suffered major revenue setbacks following global economic headwinds that were orchestrated by Russia-Ukraine war and logistics challenge triggered by China’s covid lockdowns.
Chip shortage was also a factor and unfortunately, Samsung couldn’t increase its chip production partly due to the effect of the US-China semiconductor dispute. Lee is expected to help Samsung to create strategies and investment plans that will especially boost the company’s chip production.
After apologizing to the Korean people on Friday, Lee promised to “start anew.” He said in a statement that he “will try harder to give back to society and grow together.”
The pardon which shows how much Korea relies on Samsung for its economic growth, is seen as an opportunity for the tech giant, a $280 billion company, to reclaim its market leadership position, particularly in the semiconductor industry.
“Samsung’s in a crisis as it has lost its two strengths: technology leadership and strict management,” said Park Ju-gun, head of corporate research at Leaders Index. “There’s an absence of a control tower making the right decisions at the right time to keep its leadership in the semiconductor industry.”
However, Lee’s comeback will not yield automatic rebound for Samsung as a lot of obstacles, with some having to do with him personally, will need to be cleared.
As noted by Fortune, the South Korean giant warned during its earnings call last month that the war, inflation and waning consumer demand made it immensely challenging to forecast the year ahead.
There is also concern that Lee won’t be clear of legal woes for years as he’s being separately prosecuted in relation to a merger of Samsung subsidiaries, and will be attending weekly hearings related to that case.
Considering how much Lee is needed by Samsung now, it is also not clear whether he’ll seek to take the position of chairman of the company, which has remained vacant since his father Lee Kun-hee died about two years ago.