訳:Yes, he is sorry.
So you assume that 「私は」 is omitted and the structure of the sentence is "はい、私は「彼はすまない」と思っています。". The problem is the word すまない.
すまない is the negative of 済む(すむ) "done/over", so literally it means "can't be done with" "not good enough". Thus if you interpret 彼 as the subject of this verb, it would mean something like "He can't get away with it" or "He can't be forgiven".
Actually すまない or the polite form すみません is a form of saying "sorry". It has the sense of "What I have done cannot be forgiven (but please forgive me)". We never use it in this sense with an explicit subject, but it is implied that it is the speaker or the deed of the speaker that is すまない.
I hope this explains you the reason.