Samsung names billionaire scion Jay Y. Lee as chairman

Hong Kong/Seoul
CNN business

Samsung has appointed Jay Y. Lee, its longtime de facto boss, as executive chairman.

The move was announced on Thursday and made official as to who will continue to run South Korea’s most valuable and well-known company. Lee previously held the title of Vice Chairman.

Samsung’s board of directors, which approved the change, “cited the current uncertain global business environment and the urgent need for greater accountability and business stability,” the tech giant said in a statement.

It comes just months after Lee, the scion of one of South Korea’s most powerful families, was pardoned for crimes including embezzlement and bribery.

In August, Lee received a personal apology from the country’s president for his alleged wrongdoing, with officials citing an economic crisis that required the attention of top business leaders.

The pardon ended a five-year ban on Lee from holding a formal position at Samsung. The billionaire has been jailed twice but has been on probation since last year.

Lee, commonly known as Lee Jae-yong, has been Samsung’s de facto leader since 2014, when his father fell into a coma after suffering a heart attack. Senior Lee passed away in 2020.

This week, the younger Lee celebrated the second anniversary of his father’s death and vowed to “keep his legacy alive” at a staff meeting on Tuesday.

“During that time, we’ve had to face many challenges, and at times we’ve struggled to make breakthroughs,” he said, according to a reading of notes Samsung shared with CNN Business. “Without a doubt, we are at a pivotal moment.”

READ :  Forbes Recognizes Mercury Insurance as One of the 'Best Insurance Companies in America' for 2023

“Now it’s time to plan our next move,” Lee added.

The pledge coincides with an ambitious initiative Samsung announced in May that will see the conglomerate inject more than $350 billion into its businesses and create 80,000 new jobs over the next five years.

Most of the jobs are expected to be created in South Korea, and funds will flow primarily to companies such as chip manufacturing and biopharmaceuticals.

Samsung on Thursday reported a 31% drop in operating profit, booking nearly 10.9 trillion won ($7.6 billion) in the third quarter, compared with 15.8 trillion won ($11.1 billion) in the same period of the previous year.

In an earnings presentation, the company warned that “weak demand for mobile phones and televisions” was hurting its bottom line. While the company expects “demand to partially recover in 2023,” global economic pressures will likely continue to impact its performance, it said.

However, the group was also able to look forward to record sales. Revenue reached 76.8 trillion won (nearly $54 billion) in the third quarter despite “a challenging business environment,” and continues to forecast full-year sales to exceed 2021’s.

Samsung shares rose nearly 1% Thursday in Seoul following the announcements.

— Yoonjung Seo of CNN in Seoul contributed to this report.