The Korea Herald


Samsung to review ways to disband future strategy office

By Korea Herald

Published : Dec. 7, 2016 - 16:01

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Following Samsung Electronics Vice Chairman Lee Jae-yong’s remarks to abolish the group’s future strategy office during a parliamentary hearing on Tuesday, industry watchers projected Wednesday that Samsung will continue to downsize the office, and disband it in the process of creating a holding company.

The group has reportedly been scaling down the office, as Lee values pragmatic and responsible management.

Chief communications officer at Samsung future strategy office Lee Joon answered “No” when reporters asked whether disbanding the team was planned.

He added there will be an opportunity in the near future to provide a detailed explanation on the matter.

Currently led by Choi Ji-sung, the future strategy office of 250 employees is the control tower of Samsung Group, making crucial business decisions.

The office faced public criticism over its role in the conglomerate donating 20.4 billion won ($17.5 million) to the two non-profit organizations controlled by the President Park Geun-hye’s confidant Choi Soon-sil, and providing 2.8 million euros to Choi’s daughter Chung Yoo-ra in Germany.

The office was also criticized by the lawmakers during the hearing for allegedly pressuring the National Pension Service to support the controversial merger between Samsung C&T and Cheil Industries last year.

Market experts said Samsung will speed up restructuring to minimize any management vacuum from closing down the office, with Samsung Electronics ultimately taking over the role of the office long term.

Some of the immediate plans could include downsizing and bringing in the office under Samsung Electronics, or creating a separate committee-like organization to oversee the overall operation and manage risks, according to industry watchers.

The future strategy office is comprised of some seven departments joined by around 200 executive and director-level officials dispatched from each affiliate.

On a longer-term basis, Samsung Electronics could ultimately take on the role the office had played after turning into a holding company, the observers said.

On Nov. 29, Samsung Electronics said it will increase dividends for its shareholders and review a plan to create a holding company of the group, the first time for the company to address widespread speculation that it plans to become a holding company.

Despite a number of controversies the group is mired in, Samsung Electronics’ shares renewed an all-time high for two straight days.

Samsung Electronics’ stock price on Wednesday opened at its highest ever of 1.77 million won per share, up 1.45 percent from Tuesday’s record high of 1.76 million won.

Experts say, it is the market‘s positive response to Samsung Electronics’ announcement last month to increase stockholders’ dividends and to review restructuring. 

By Kim Bo-gyung (