Investors are worried about the business abilities of the supposed next chairman of the OEM.
Telegram.com reported on the chain of succession in terms of chairmanship and “command of one of the world’s most valuable consumer brands” at Samsung, building on previously reported trouble concerning the OEM’s smartphone business’ “dizzying decline”.
The site notes that “another issue is vexing investors” in the shape of the chain of succession from current Chairman Lee Kun-hee, who suffered a heart attack in May aged 72, to his only son, Lee Jae-yong. The younger Lee’s “business abilities remain a mystery despite being elevated two years ago to a top role at the company”, with expectations of a “leadership shift” growing after the elder Lee’s heart attack.
Lee Kun-hee “never publicly named” his heir and remains in hospital, and the site adds that “within the financial world and South Korea […] there is little doubt [Lee Jae-yong will] be the third generation of the Lee family to head the sprawling business”. The younger Lee, aged 46, was promoted to Vice Chairman in 2012 after joining Samsung in 1991, and his “increasing sway” over the company comes as the mobile phone business has hit a large decline after a quick success.
Analysts speculated that Samsung is “ailing” amid a 60 percent fall in profits in its quarterly results, questioning whether “poor marketing [is] to blame” and warning that it “must not repeat [the] mistakes of Motorola and Blackberry in [the] volatile mobile market”. The results came amid concerns that “cheaper, and ever-improving, competitors are gaining ground” in the smartphone sector, with the recent Galaxy S5 phone receiving “lukewarm [reviews] at best”.
The air of mystery around Lee Jae-yong means that what little is known “paints a picture of a privileged and rarefied existence”, and one former Samsung lawyer wrote a book claiming that he “had little understanding about the lives of ordinary people, and was not embarrassed by that”. While becoming the public face of the OEM, and meeting other CEOs including Mark Zuckerberg of Facebook and Tim Cook of Apple, he has “never given an interview”.
While the South Korean media “increasingly attributes big decisions” to Lee, his known business record includes “the failure of Samsung’s internet ventures in 2000”, and the company’s family-based control structure means neither Lee is part of the board of directors.
Park Yoo-kyung, from Samsung investory APG Asset Management Asia, commented: “There is no information to know the track record of his leadership, his crisis management ability and how he carried out his business vision. When shareholders approve management during the shareholders meeting, they do not know the most important profile.”