Samsung Electronics has officially appointed a new Executive Chairman. Heir to the Samsung empire, Lee Jae-young (aka Jay E. Lee) ascended the throne of the world’s largest chipmaker on Thursday. Samsung announced the move along with its third-quarter 2022 earnings report, which likely hopes to deflect attention from a 23 percent quarter-on-quarter drop in earnings.
Lee has been the de facto head of Samsung for several years, so his appointment is mostly formal. The former chairman of Samsung and Lee’s father, Lee Kun Hee, died in 2020, but prior to that, he had been incapacitated for years after suffering a heart attack in 2014. Lee’s ascension to the chairmanship was always expected, but it was delayed due to Lee’s many legal problems.
If you ever need a wild reading topic, look up Choi-gate, a South Korean political scandal involving bribes paid to Choi Sun-sil, a “shamanic cult member”who had a Rasputin-like influence over the then president of South Korea.. , Park Geun-hye. Lee’s role in the scandal was to bribe Choi into convincing President Park to approve the merger of the two subsidiaries of the Samsung Group. Lee was initially sentenced to five years in prison, while Park was impeached and removed from office. (Samsung’s ruling family is so dramatic that NBC once considered making a TV series based on them. You can see why!)
However, the Samsung empire accounts for about 20 percent of South Korea’s gross domestic product, and the country is notorious for its leniency towards its top leaders. An appeal and retrial reduced Li’s five-year prison sentence to 30 months, and after serving 18 months of that sentence, Li was released on parole. Lee technically couldn’t work at Samsung while on parole, but that didn’t stop him from giving President Biden a tour of the facilities in May.
In August, Lee received a presidential pardon, ending his parole conditions and paving the way for him to take over as chairman. A criminal at the helm would mean the Prince of Samsung will follow in his father’s footsteps. Lee Sr. was convicted of bribery in 1996 and tax evasion and breach of trust in 2009, but in both cases he was never arrested, never served a prison sentence, and was later pardoned by the president. The official title of chairman – and the opportunity to officially work at Samsung again – gives Lee more political influence, allowing him to take more serious steps and make strategic decisions.
The new chairman’s legal problems are not necessarily over. Lee still faces another trial for share price manipulation and accounting fraud.