The return of Lee Kun-hee to the management of the Samsung business empire is focusing attention on the role of Lee Jae-yong, his eldest son and chief operating officer of Samsung Electronics. The world's largest memory chipmaker is currently co-headed by Lee junior and president and CEO Choi Gee-sung.
Lee Kun-hee retired after a corruption conviction 18 months ago but was according to the company "persuaded" by the management team consisting mostly of relatives to come back.
Staff at the conglomerate say they expect Lee Jae-yong's role to expand with his father's return. "It is difficult to predict the exact timing of the transfer of management control, but Lee's return will certainly bolster his son's control," one staffer said.
Lee Jae-yong started at Samsung Electronics in 1991 and learned the ropes in different parts of the company until 2004. In 2004, he became an executive board member of S-LCD, a joint venture with Sony. He was promoted to executive director in January 2007 and assumed the role of COO of Samsung Electronics.
But when a whistleblower in October 2007 revealed a slush fund amassed by the conglomerate, Lee junior's ascent through the ranks of Samsung Electronics was temporarily put on hold. Significant holdings in the family firm were transferred tax-free to Lee junior through stock-option deals.
"Unforeseen events occurred while COO Lee was entering the management ranks and the transfer of leadership did not take place as smoothly as chairman Lee had wanted it to be," one informed source said.
But others say the younger Lee now has a chance to prove his management skills. "With less than 10 years of experience on the front lines of management, Lee Jae-yong now has to prove his mettle," said one source in the business community. Some say Lee Jae-yong and his sister Lee Boo-jin are in a race over the top post at the conglomerate.
"In terms of stakes in the conglomerate, Lee Jae-yong comes out on top as the majority shareholder (25.1 percent) in Samsung Everland," the de facto holding company of the business group, a source in the financial industry said. "But Lee Boo-jin owns 8.37 percent of Everland and has been taking part in the management of the amusement park operator since last year."
According to the source, this means she could rise to the top post if she proves her management skills. But Samsung says the decision has been made and Lee Jae-yong will inherit his father's mantle and the roles of his other children have also been determined. The company says Lee senior's return will serve to consolidate their roles.