Samsung Names Jay Y. Lee Executive Chairman

The board of directors at Samsung Electronics has approved the appointment of Samsung heir Jay Y. Lee as Executive Chairman of the company.

The South Korean electronics giant cited the current uncertain global business environment and the pressing need for stronger accountability and business stability as its reasoning.

The appointment of Jay Y. Lee, aged 54, is a largely a symbolic move confirming that South Korea’s most valuable company will be officially run by the third generation of its founding family. Samsung was founded by Lee’s grandfather back in January 1969.

Samsung heir

Jay Y. Lee has been the de facto head of the conglomerate since May 2014, after his father (Lee Kun-hee) then aged 72, suffered an incapacitating heart attack and lapsed into a coma.

Lee Kun-hee remained in a coma (retaining the Samsung chairman title) until he died in 2020, aged 78 years old.

Jay Y. Lee told over the running of the conglomerate, but he ran into trouble in 2017 when the South Korean prosecutor’s office accused Lee of bribery, embezzlement and perjury, relating to alleged bribes of a former president.

In August 2017 Lee was found guilty and sentenced to five years in prison, but this was later reduced to 2.5 years, which was suspended, meaning Lee was released from prison after one year’s detention.

But he was returned to prison in January 2021 after the case was returned to South Korea’s high court.

Seven months later Lee was released from prison in August 2021 on parole after serving 207 days in jail.

His release came amid concerns that without Lee’s presence major decisions were not being made at Samsung.

The US also argued his presence was vital to help ease the global semiconductor shortage, while the office of South Korean president Moon Jae-in cited the “severe crisis” caused by the Covid-19 pandemic.

However civic groups in August 2021 criticised Lee’s parole as another sign that the leniency shown to the country’s business elite undermines the rule of law.

Presidential pardon

A year late in August 2022, President Yoon Suk-yeol granted a pardon to Lee, citing Samsung’s importance to the economy.

The presidential pardon opened the door for Lee to take up leadership of the conglomerate, which in South Korea is known as chaebol (the country’s business sector is dominated a number of such chaebols).

The appointment of Lee at Samsung comes as the tech giant faces a sharp downturn in worldwide tech demand, as household budgets and consumer spending is squeezed by rising interest rates, soaring inflation, and a gloomy economic outlook.

On Thursday Samsung posted a 31 percent drop in third-quarter profit and warned that geopolitical uncertainties was likely to dampen demand until early 2023.