Samsung appoints heir Lee Jae-yong as executive president

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On Thursday, South Korean giant Samsung Electronics named former inmate and third-generation heir Lee Jae-yong as executive chairman.

The move solidifies Lee’s rehabilitation within the family-owned company, after he was jailed in 2017 for bribing former South Korean president Park Geun-hye. The high-profile corruption scandal ignited national protests and led to Park impeachment and removal from office.

Lee, who in the West goes by the name of Jay Y. Lee, received presidential pardon a few months ago, lifting the five-year labor ban that had been a part of his sentence and paving the way for him to formally regain control of the conglomerate.

Samsung’s board of directors said in a brief statement that it had “approved the appointment of Jay Y. Lee as executive chairman of the company.” The board cited “the current uncertain global economic environment and the pressing need for greater corporate accountability and stability,” in making its decision, the statement added.

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Lee, 54, had already been seen as Samsung’s de facto leader after his father and former president Lee Kun-hee fell ill and then died in 2020. Lee Kun-hee was also separately convicted of corruption and tax evasion. , and then sorry.

Samsung, which means “three stars” in Korean, gained global recognition in the 1970s when it began mass-producing household appliances. It has quickly become a consumer powerhouse boasting dozens of affiliates from electronics to hotels and insurance, among others. Samsung earned about 76 trillion South Korean won ($ 54 billion) in the third quarter of 2022 and has a market capitalization of nearly $ 300 billion. It is one of the few family-owned conglomerates known as chaebols, which dominate economic life in South Korea, others include LG and Hyundai Motor Co.

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Lee was convicted in 2017 of bribery, embezzlement, illegal transfer of assets overseas, concealment of criminal proceeds and perjury after being found guilty of bribing former South Korean President Park Geun-hye and the his confidant to get the favor of a merger agreement. She was granted five years in prison but was paroled after serving 18 months in prison.

The presidential pardon Lee received in August from President Yoon Suk-yeol reflects Samsung’s size and influence, as well as the extension’s political popularity. they lose in the name of economic necessity. Polls shortly after her pardon showed overwhelming public support for the decision, with more than three-quarters of the South Korean public backing her.

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Lee takes the helm of the multibillion-dollar company as it faces a global economic recession. The company, which makes smartphones and semiconductor computer chips, will feel the pinch of lower consumer spending and rising inflation along with the ongoing war in Ukraine, which has stifled international trade.

On the same day it announced Lee’s promotion, the company released its third quarter financial results noting a “tough business environment”. It reported that its operating profit was down 23% from the previous quarter to 10.85 trillion Korean won ($ 7.7 billion) for the July-September quarter. He also noted a “decline” in corporate earnings for memory chips and noted that demand for consumer products “remained weak.”

Despite this, the company said its mobile phone business was posting “record revenue” and expects “overall annual revenue to exceed the all-time high set in 2021”, although “geopolitical uncertainties” are likely to continue to rise. weigh in 2023, he added.

Lee said the company was in a “pivotal moment” that required swift and bold action during a meeting with Samsung’s top executives earlier this week, the Associated Press reported.

Hamza Shaban and Aaron Gregg contributed to this report.