Samsung Electronics Says Chairman Lee to Promote His Son to President
The chairman told reporters today he plans to promote Lee Jae Yong to president from executive vice president during the annual management reshuffle next month, said a Samsung Group spokesperson, who declined to be named, citing company policy. There are 17 presidents at Samsung, including Chief Executive Officer Choi Gee Sung.
The promotion may increase investor scrutiny of the 42- year-old Lee’s ability to lead Asia’s largest electronics company, which generates more than $100 billion in annual sales. Since Lee Kun Hee took over from his father in 1987, Samsung’s market value has jumped more than 70-fold to surpass Hewlett- Packard Co., Sony Corp. and Texas Instruments Inc.
“This is all part of the widely expected management succession story at Samsung,” said Kim Sun Woong, executive director at the Center for Good Corporate Governance in Seoul. “The chairman must be wanting to promote Lee Jae Yong to president quickly and get his management abilities recognized.”
Samsung Electronics fell 2 percent to close at 795,000 won in Seoul, compared with the 0.1 percent drop by South Korea’s benchmark Kospi stock index.
Harvard, Keio University
Lee Jae Yong, who studied at Harvard Business School and Japan’s Keio University, joined Samsung Electronics in 1991. His roles in the company have included being the chief customer officer and vice president at the strategic planning division. He was promoted to executive vice president and chief operating officer last December, three months before the elder Lee returned as chairman.
His father, 68, returned to Samsung in March after he received a presidential pardon from a conviction of tax evasion to help South Korea’s bid to host the 2018 Winter Olympics. He stepped down in 2008 after being charged with tax evasion and breach of fiduciary duty for causing losses at Samsung Group.
The promotion comes at a time when a family feud between Hyundai Group and Hyundai Motor Group over control of Hyundai Engineering & Construction Co. is reviving investor concern about the South Korean business model of family-run conglomerates, known as chaebols.
Hyundai Engineering and Hyundai Group’s Hyundai Merchant Marine Co. both fell for a second day in Seoul trading after plunging by the 15 percent daily limit yesterday.
The International Monetary Fund cited the chaebol and their debt-driven practices as part of the reason why South Korea’s economy fell into financial crisis at the end of 1997.
Samsung Electronics, based in Suwon, last month reported third-quarter profit rose 17 percent to a record 4.46 trillion won ($3.9 billion), led by sales of semiconductors. The company forecast earnings will weaken in the fourth quarter amid falling prices of chips, screens and televisions.
To contact the reporter on this story: Jun Yang in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: Young-Sam Cho at email@example.com.