April 27, 2024

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[THE INVESTOR] 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 the chairman Lee Jay-hyun's possible return to management.

“Sales grew slightly last year but the group’s sales remained in twenty-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.

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 by 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.

CJ officials and market watchers, however, see that the group making such massive investments would require Lee’s approval, after his official comeback.

The group, however, declined to give details, that they would not know when Lee plans to return but they only hope for him to be back after the company’s reshuffle in March or in April.

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, Chairman Lee vowed he would devote his life to the country.

By Park Ga-young/The Korea Herald (gypark@heraldcorp.com)