SEOUL (Reuters) - Jay Y. Lee has wealth and fame, and now he likely has the keys to the kingdom of South Korea’s powerful Samsung Group.
Like his father, who as chairman moulded the sprawling conglomerate into a global technology powerhouse that accounts for a fifth of South Korea’s exports, Lee’s secretive ways have made him an object of fascination and speculation at home.
The 41-year-old, listed by Forbes magazine this year as South Korea’s seventh-richest man worth $880 million, was promoted on Tuesday to the newly created role of chief operating officer at Samsung Electronics in a move seen as possibly geared toward succession at the corporate giant.
The snappily dressed and bespectacled Lee has a bachelor’s degree in East Asian history from Seoul National University, an MBA from Keio University in Japan and has also attended the doctoral program at Harvard Business School.
Lee, also known as Jae-young, was at the centre of one of South Korea’s most intriguing divorce cases this year when details of his lavish spending habits enthralled a public that knows little of the private lives of the Lee family that founded Samsung in 1938 under Japanese colonial rule and has run the conglomerate since.
Samsung Electronics also named Choi Geesung as CEO in a management shake-up designed to make the company more nimble. He is expected to connect the younger Lee to his father in management transfer.
“Major South Korean chaebol (family-owned conglomerates), including Samsung, are walking a thin line between transparent governance structure and fast and forward-looking decision making,” said Lim Young-jae, researcher at state-run think-tank the Korea Development Institute.
Lee’s rise to power took a detour in April 2008 when his father Lee Kun-hee said he would step down after being implicated in a corruption scandal that centred on succession within the Lee family. [ID:nTOE5BE065]
Jay Y. Lee stepped down, too, from his post as Samsung Electronics chief customer officer and moved to an overseas position.
The younger Lee’s new role was created amid concerns about the absence of a key decision-maker at the world’s top maker of memory chips, televisions and LCD flat screens.
Since Lee Kun-hee’s departure, domestic media have voiced concerns about a possible delay at Samsung in deciding on major investments and new business ventures.
Some newspapers noted Samsung’s entry into semiconductors in 1983 was thanks to its founder’s brave decision that helped shape a sugar maker and trader into a global powerhouse in consumer technology and chips.
Deepening competition from Japanese rivals such as Sony Corp (6758.T) and Panasonic and the emergence of Chinese brands have added to those worries, with the manufacturing industry bracing for new technology such as organic displays, 3D TV and solar panels.
“Now Samsung is at a turning point and in the transitional period moving from second-generation family management to the third-generation,” said Oh Sang-hoon, SK Securities’ research head.
“From Samsung Group’s standpoint, it has to envision new businesses with Samsung Electronics at the centre. In that regard, returning to ownership management will give the group a psychological relief.”
There have been campaigns in recent months to pardon Lee’s father, who was handed a suspended 3-year jail term for tax evasion last year.
Samsung’s former chairman, ranked by Forbes as the country’s wealthiest man worth $3.9 billion, is looking to resume his role as a member of the International Olympic Committee as South Korea joins the bidding to host the 2018 Winter Olympic Games.
Lee Snr owns 3.4 percent of Samsung Electronics, while Jay Y., his only son, holds just a 0.6 percent stake.
Additional reporting by Christine Kim; Editing by Jon Herskovitz and Ian Geoghegan