Samsung succession in disarray as Lee criminal case advances
seoul — The long-orchestrated plan to cement Jay Y. Lee’s position atop Samsung Group may put him in jail instead, raising questions about who would step in to run South Korea’s biggest conglomerate in the aftermath.
Prosecutors are seeking Lee’s arrest on allegations including bribery and embezzlement, which if proven could prompt him to relinquish duties at the family business. Potential replacements include executives running key divisions of the dominant electronics business, as well as a sister — hotel executive Lee Boo-jin. While a long shot, her anointment would mark a seismic shift in the way the nation’s patriarchal empires are run.
After spending years following his father’s footsteps to the chairman’s seat of Samsung Group, Lee is trying now to avoid the missteps that triggered his father’s two criminal convictions. Even if the accusations against him involving South Korea’s president are proven in court, it’s still possible Lee could return to the company later or even call the shots from behind bars, just as executives from Hyundai Motor Co and SK Group have done. “Chaebol executives have a history of managing from the jail, whether it be via lawyers or secretaries visiting them,” said Lee Kyung-mook, a professor at Seoul National University’s Graduate School of Business.
Samsung declined to comment when asked about a potential leadership vacuum. A court hearing is scheduled for Wednesday to determine whether to approve the prosecutor’s request for an arrest warrant. Whether the warrant is granted or not, prosecutors would continue their probe, with a possible indictment coming later. Lee testified last month that he never ordered donations to be made in return for political favours.
Shares rebounded Tuesday after a two-day decline. Lee’s potential arrest in the scandal surrounding President Park Geun-hye is another
Chaebol executives have a history of managing from the jail, whether it be via lawyers or secretaries visiting them Lee Kyung-mook, Professor, Seoul National University’s Graduate School of Business
calamity for the vice chairman of Samsung Electronics Co, the largest maker of mobile devices. Last year, the company pulled its Galaxy Note 7 smartphone off the shelves because some devices burst into flames. The debacle cost Suwonbased Samsung an estimated $6 billion and a competitive advantage before Apple released its iPhone 7 models.
Lee, 48, has had trouble matching the success of his father, Lee Kun-hee, who transformed Samsung Electronics from a copycat appliance maker into a global powerhouse in TVs, smartphones and memory chips. The elder Lee — South Korea’s richest man — suffered a crippling heart attack in May 2014, and Samsung shares fell that year and the next before recovering in 2016.