South Korea’s food and entertainment giant CJ Group is set to expand investments and speed up its delayed plans to tap more markets around the world by carrying out a personnel reshuffle in March, the group said Sunday, hinting at chairman Lee Jay-hyun’s return to management.
“Sales grew slightly last year but the group’s sales remained at 20-something trillion won for the last three or four years,” an official at CJ Group said. “We need to spur growth in order to reach the Great CJ goal by 2020 and the decision-making is somewhat slower with the absence of the owner,” she said.
CJ Group Chairman Lee Jay-hyun (Yonhap)
The group’s sales exceeded 30 trillion won ($26 billion) last year for the first time. But it is far short of the group’s goal to reach 100 trillion won in sales by 2020. It plans to generate 70 percent of the 100 trillion won from overseas markets.
Between 2013 and 2016, coinciding the absence of the chairman, the group’s investments remained less than 2 trillion won every year, compared with 2.9 trillion won in 2012.
Lee was indicted in 2013 on charges of embezzlement and tax evasion, and was sentenced to two years and six months in jail in December 2015. He was released through a presidential pardon in August 2016.
After the chairman’s release, CJ unveiled a plan to invest 5 trillion won this year to seek merger and acquisition deals in bio, logistics and cultural industries. The group aims to achieve 40 billion won in sales this year, up 30 percent from the previous year.
CJ officials and market watchers see that the group making such massive investments would require Lee’s approval after his official comeback.
The group, however, declined to give details on when Lee plans to return, only saying they hope for him to be back after the company’s reshuffle in March or in April when the group will begin to carry out its investment plans in earnest.
The group’s much-delayed organizational and personnel reshuffling is expected to be carried out before April, according to multiple sources at CJ Group.
The group usually reshuffles its organization at the end of the year. But it has been delayed amid a political scandal involving President Park Geun-hye and her confidante Choi Soon-sil.
South Korea’s major conglomerates including CJ Group have been accused of making donations to the foundations controlled by Choi. CJ is suspected of making donations in exchange for the presidential pardon that led to the release of the chairman.
Lee’s improved health has raised speculation of his return to full-fledged management.
“Lee’s health has been improving since he was released last year,” the official said. He suffers from Charcot Marie Tooth Disease, an inherited neurological disorder. In 2013, the chairman received a kidney transplant.
In August, after he was pardoned by the president, Lee vowed he would devote his life to the country.
CJ Group is currently run by CJ Group Co-chairman Sohn Kyung-shik, Lee’s uncle, who returned to CJ when his nephew was arrested in 2013.
By Park Ga-young (email@example.com