Samsung heir takes over

He will head foundations that hold stakes in Samsung life Insurance which will help Lee family to control the group

Samsung Group heir apparent Jay Y Lee will take over from his father Lee Kun-hee as head of two key foundations, the conglomerate said on Friday, suggesting that a transfer of leadership is underway at South Korea’s largest conglomerate.

Jay Y Lee, 46, will succeed his 73-year-old father, who has been hospitalised since suffering a heart attack more than a year ago, as chairman of Samsung Life Public Welfare Foundation and Samsung Foundation of Culture from May 31, a Samsung Group spokeswoman said.

The foundations hold stakes in Samsung Life Insurance, an important piece in the conglomerate’s complicated ownership structure that enables the Lee family to control the group despite their relatively small stakeholdings.

Samsung insiders say that since his father’s hospitalisation the younger Lee has been the main decision-maker at the vast conglomerate, which includes smartphone giant Samsung Electronics. The foundation appointments, however, mark the first time he has formally assumed leadership roles from company patriarch Lee Kun-hee, who is chairman of Samsung Electronics.

“A key point in the succession process is controlling the foundations, because they hold stakes in key Samsung Group companies,” said Park Ju-gun, head of corporate watchdog CEO Score.

“I think it’s safe to say that the succession process is near a final stage.”

Samsung Group has undertaken a series of moves over the past year that investors and analysts see as preparing the way for a stable handover from the elder Lee to his three children.

There has been no official confirmation of any succession planning from the company itself, however, and the Samsung Group spokeswoman on Friday declined to comment on when or whether Jay Y Lee would take over as chairman.

In one recent maneuver, the listings of Cheil Industries and Samsung SDS gave Jay Y Lee and his two sisters financial firepower to deal with what could be a more than a $6 billion inheritance tax when their father passes away.

Some investors and analysts believed they spotted Jay Y Lee’s newfound power in a spike in acquisitions by Samsung Electronics, as well as a decision to sell the conglomerate’s non-core chemical and defense arms late last year.

But the heir apparent will be reluctant to assume too much authority while his father is still alive, group watchers have said.

The Samsung Group spokeswoman said the elder Lee remained in a stable condition, although people familiar with the matter have said he is unable to converse.