Hong Kong/Seoul
DailyExpertNews Business
—
Samsung has appointed Jay Y. Lee, the longtime de facto leader, as its executive chairman.
The move was announced on Thursday and officially revealed who would continue to lead South Korea’s most valuable and well-known company. Lee had previously held the title of vice chairman.
Samsung’s board of directors, which approved the change, “referred to the current uncertain global business environment and the urgent need for stronger 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 such as embezzlement and bribery.
In August, Lee was personally apologized by the country’s president for his alleged misdeeds, with officials citing an economic crisis that demanded the attention of key business leaders.
The pardon ended a five-year ban on Lee who held a formal position at Samsung. The billionaire was sent to prison twice, but has been on parole since last year.
Lee, also commonly known as Lee Jae-yong, has been the de facto leader of Samsung since 2014, when his father fell into a coma after a heart attack. The senior Lee passed away in 2020.
This week, the younger Lee celebrated the second anniversary of his father’s death and vowed “to preserve his legacy” during a staff meeting on Tuesday.
“During this period, we have faced many challenges, and at times we have struggled to make breakthroughs,” he said, according to a readout of comments Samsung shared with DailyExpertNews Business. “We are undoubtedly at a crucial moment.”
“Now is the time to plan our next step,” Lee added.
The pledge coincides with an ambitious commitment Samsung announced in May that will see the conglomerate pump 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 in South Korea, and the funds will mainly go to companies such as chip-making and biopharmaceuticals.
Samsung reported a 31% decline in operating profit on Thursday, with nearly 10.9 trillion Korean won ($7.6 billion) recorded in the third quarter, compared with 15.8 trillion won ($11.1 billion) in the same quarter. period last year.
In an earnings presentation, the company warned that “weak demand for mobile phones and TVs” is hurting its profits. While the company expects “demand to partially recover in 2023,” global economic pressures are likely to continue to affect performance, it said.
However, the group also enjoyed record sales. It said third-quarter revenue had reached 76.8 trillion won (nearly $54 billion) despite “a challenging business environment,” and still forecasts full-year revenue to surpass 2021.
Samsung shares rose nearly 1% in Seoul on Thursday following the announcements.
— Yoonjung Seo of DailyExpertNews in Seoul contributed to this report.