The Korea Herald


Samsung issues sweeping gag order on employees, suppliers

By Kim Young-won

Published : Oct. 18, 2016 - 16:16

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[THE INVESTOR]  After losing face due to the problem-ridden Galaxy Note 7, Samsung Electronics has been increasing its vigilance, urging its employees and partners to be extra cautious of possible leaks of its confidential business information, according to sources.

In a recent email sent to Samsung executives and employees, the company emphasized that “leaks of operational secrets can cause irreversible ramifications, posing a great financial risk on the company and leading to broken partnerships and loss of trust,” urging its executives and employees to tighten up security.

Facing a series of controversial issues to solve, such as hedge fund Elliott Management’s call for the tech firm’s management restructuring and the ongoing Note 7 crisis, market watchers assumed the message shows that Samsung is now on high alert at an unprecedented level.

Samsung Electronics Vice Chairman Lee Jae-yong Samsung Electronics Vice Chairman Lee Jae-yong

Some even speculated such a move is related to Samsung Group’s preparation for the power succession from bedridden Samsung Group Chairman Lee Kun-hee to his son.

Samsung Electronics Vice Chairman Lee Jae-yong is scheduled to be appointed as a registered board member in a shareholders meeting on Oct. 27.

The tech giant’s latest call for caution over a possible leak of information came in the wake of the ongoing Note 7 crisis, which has been seriously hurting Samsung’s profits and reputation.

An official from one of Samsung’s parts suppliers said, on condition of anonymity, that Samsung which is well known for micromanaging its partnership deals with suppliers is making more efforts than before to prevent any information leak on new handsets as well.

“Samsung has notified its suppliers not to mention a single word on the Galaxy S8,” the official said.

The firm’s parts suppliers are currently working on the upcoming flagship phone that is expected to be unveiled in February next year.

Like other smartphone makers, such as Apple, Samsung applies a rigorous set of standards to its partnerships, sometimes switching supply of electronic parts from one to another, or charging penalty fees on a partner, in case of violation of non-disclosure agreement.

By Kim Young-won (