Samsung Electronics officially has a new CEO. Heir to the Samsung empire Lee Jae-yong (aka Jay Y. Lee) ascended the throne of the world’s largest chipmaker on Thursday. Samsung announced the move along with its earnings report for the third quarter of 2022, which is likely to distract from the 23 percent quarter-on-quarter earnings decline.
Lee has been the de facto leader of Samsung for a number of years, so his appointment is mostly a formality. Former Samsung chairman and Lee’s father, Lee Kun-hee, died in 2020, but before that he was unable to work for years after suffering a heart attack in 2014. Lee’s rise to chairman was always expected, but was delayed due to Lee’s numerous legal issues.
If you ever want a wild reading topic, look up “Choi-gate,” a South Korean political scandal involving bribes paid to Choi Soon-sil, a “shamanistic cult member” who exerted Rasputin-like influence on the then-president South Korea’s had , Park Geun-hye. Lee’s role in the scandal was to bribe Choi to persuade President Park to agree to a merger of two Samsung group subsidiaries. Lee was originally sentenced to five years in prison, while Park was charged and impeached. (Samsung’s ruling family is so full of drama that NBC once considered building a TV drama series on it. You can see why!)
However, the Samsung empire is responsible for about 20 percent of South Korea’s gross domestic product, and the country is notoriously lenient with its top executives. An appeal and retrial reduced Lee’s five-year sentence to 30 months, and after eventually serving 18 months of that sentence, Lee was paroled. Lee technically couldn’t be employed at Samsung while on parole, but that didn’t stop him from giving President Biden a tour of the facilities in May.
In August, Lee received a presidential pardon that ended probation and paved the way for him to take over the presidency. Having a criminal at the helm just means Samsung’s prince is following in his father’s footsteps. The elder Lee was convicted of bribery in 1996 and tax evasion and breach of trust in 2009, but on both counts he was never arrested, never served a prison sentence and later received a presidential pardon. The formal title of chairman — and the ability to formally return to work at Samsung — gives Lee more political clout to make bigger moves and strategic decisions.
The new chairman’s legal woes aren’t necessarily over. Lee faces another trial for stock price manipulation and accounting fraud.