Following Arrest of Samsung’s Jay Lee, Mentor Seen as Stepping Up
The arrest of Jay Y. Lee the scion of the Samsung Group on charges of bribery could slow down decisions on strategic acquisitions and investments at the conglomerate, said insiders, even with many of its businesses under strong leadership.
Although business is well at Samsung Electronics, the flagship company, big calls must be made and the person that likely will be given the role of making them will be CEO Choi Gee-sung, one of the top executives at Samsung Group and a mentor of Lee.
One insider at Samsung said that Choi was experienced and has had success making him very well placed to manage affairs at the group level in the absence of Lee.
While the South Korea based electronics giant is still hurting from its failure with the Galaxy Note 7 smartphones, its semiconductor business has seen its stock increase by 60% over the last year.
However, the investigation for bribery that has caused the arrest of Lee, and was part of the reason parliament impeached the country’s president has been a huge distraction for the largest conglomerate in the country.
Some others have said that even the role of Choi could have limits and that Samsung might need to rely on top management from each affiliate, with Choi being under investigation as well by the country’s special prosecutors.
Another insider at Samsung has said that the company has a system with teams made up of professional management so the day to day running of the company should not be affected.
However, Lee’s arrest will have its impact on the investment decisions over the long term at Samsung.
Samsung presidents have evaluations based on annual results so they cannot make bets over the future, as they needed a chairman to do so.
Samsung did not comment related to the plans of management or the role Choi would play.
In his career at Samsung, that has spanned over three decades, Choi has worked in every main business, from home appliance to telecoms and semiconductors to televisions prior to taking over the role of CEO.
As strategy head, Choi, who is 68, has acted as the mentor to Lee and has been involved closely with preparing Lee’s path to take the spot of his father who in 2014 became incapacitated due to a heart attack.
Under the guidance of Choi, Lee was moving closer to succeeding his father based on a long term well thought out plan.