Shinsegae Group Chairman Chung Yong-jin greets guests before his wife's concert in Seoul, Wednesday. Newsis

Doubts are growing about Shinsegae Group Chairman Chung Yong-jin’s ability to lead the retail giant, as the group has suffered setbacks in major projects, including the deployment of artificial intelligence (AI) in its businesses and the merger of affiliates.

Last month, Shinsegae Group baffled the market by abruptly canceling its partnership with OpenAI just 11 days after signing a memorandum of understanding with the developer of ChatGPT. Instead, the Korean conglomerate partnered with Reflection AI, another U.S. AI company, citing a “selection and concentration” strategy.

Amid mounting criticism of Shinsegae Group’s hasty decision-making and its lack of thorough technological review, the reversal led to the removal of Shinsegae Property CEO Lim Young-lock from his concurrent post as the group’s chief strategy officer. Lim had signed the agreement with OpenAI Korea Country Manager Kim Kyung-hoon on April 6 for the joint development of an AI-powered e-commerce model with advanced customization features.

Although Shinsegae Group said the personnel change was necessary to allow him to focus on Shinsegae Property-led projects, the dismissal has been widely interpreted as a disciplinary measure holding him responsible for the flawed decision-making process.

“Until we appoint a new chief strategy officer, our business strategy office will continue to serve as the control tower under the chairman’s leadership,” Shinsegae Group said in a press release Wednesday.

Shinsegae Group Chairman Chung Yong-jin, second from left, and Reflection AI CEO Misha Laskin, left, talk with Prime Minister Kim Min-seok at Government Complex Seoul, March 24. Courtesy of Prime Minister's Office

The slow progress in the merger of E-mart and Shinsegae Food is another headache for the group. Shinsegae Group has pushed ahead with the merger since last December, citing the need to streamline decision-making.

Initially, Emart’s tender offer and the subsequent delisting of Shinsegae Food were proposed as ways to make the food company a wholly owned subsidiary of the discount store chain.

However, the plan triggered backlash from minority shareholders of Shinsegae Food, who argued that their shares were undervalued and that the deal would primarily benefit the company’s major shareholders. Chung has effectively been the largest stakeholder in Shinsegae Food, through his 28.85 percent stake in Emart, which in turn holds a 71.18 percent stake in Shinsegae Food.

Source: Korea Times News