By Lee Min-hyung
Thursday marks the 1,000th day since Samsung Group Chairman Lee Kun-hee fell into a coma due to a heart attack. Without his leadership for three years, the country's largest conglomerate has faced its ups and downs.
Lee has not made any public appearances since he was hospitalized in May 2014, leaving more burdens on his only son Jae-yong, now serving as Samsung Electronics vice chairman and the heir of Samsung Group, to fill the unexpected leadership vacuum.
At that time, a wave of concern gripped the IT titan and Jae-yong, as it came at a critical time when Samsung had to bolster its corporate value to leap into the position of the world's most powerful smartphone manufacturer.
It was not long before that the company enjoyed its heyday as a premium smartphone vendor for its flagship Galaxy series, due to its relatively-weaker brand value than Apple iPhones.
But during Lee Kun-hee's absence, the company has succeeded in transforming itself as the world's most powerful smartphone and parts supplier, as shown in its latest operating profit and enhanced stock value. This has enabled the firm to become the world's 11th largest company by market capitalization as of the end of last month.
Samsung Electronics shares on May 12, two days after Lee lost his consciousness, were traded at 1.38 million won ($1,210). But it surged more than 40 percent on Wednesday when the firm closed at 1.96 million won thanks to its growth despite Kun-hee's absence.
The firm's impact has also surged during the past 1,000 days, with its market capitalization reaching some 307 trillion won as of Wednesday.
Aside from the improving stock value, critics say that Jae-yong has dispelled the previous concerns by successfully shifting the firm's portfolio through aggressive mergers and acquisitions (M&A).
Last year, Samsung Electronics signed multiple M&A contracts with renowned IT players abroad. The latest in a series of M&As came in November last year when it reached its 8 billion won acquisition deal with U.S.-based auto-parts supplier Harman. This came as part of the firm's group-wide investment initiative for next-generation growth areas.
This is the largest M&A deal in Samsung's history. This is also interpreted as Jae-yong's first meaningful step-forward to find its new revenue sources that his father had not established.
"There have been widespread concerns over Jae-yong's leadership, as he had made few public appearances before Kun-hee was hospitalized," an industry source said. "But he has cast off the worries from the market by successfully managing a serious of crises such as the worldwide recall of the Galaxy Note 7."
Despite the unprecedented handset recall, the company posted a stunning operating profit of 9.22 trillion won in the fourth-quarter last year, up 50 percent from the previous year.
"His crisis management and such aggressive M&A contracts proved his capability as the new leader of the conglomerate."
But Jae-yong is now facing trouble due to the corruption scandal involving President Park Geun-hye and her confidant Choi Soon-sil. Midway through last week, the independent counsel team sought an arrest warrant for him on charges of bribery and embezzlement with regard to the scandal.
The detention warrant was rejected by the court but he still would have to go through a trial for quite a long time.
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| Lee Kun-hee |
Lee has not made any public appearances since he was hospitalized in May 2014, leaving more burdens on his only son Jae-yong, now serving as Samsung Electronics vice chairman and the heir of Samsung Group, to fill the unexpected leadership vacuum.
At that time, a wave of concern gripped the IT titan and Jae-yong, as it came at a critical time when Samsung had to bolster its corporate value to leap into the position of the world's most powerful smartphone manufacturer.
It was not long before that the company enjoyed its heyday as a premium smartphone vendor for its flagship Galaxy series, due to its relatively-weaker brand value than Apple iPhones.
But during Lee Kun-hee's absence, the company has succeeded in transforming itself as the world's most powerful smartphone and parts supplier, as shown in its latest operating profit and enhanced stock value. This has enabled the firm to become the world's 11th largest company by market capitalization as of the end of last month.
Samsung Electronics shares on May 12, two days after Lee lost his consciousness, were traded at 1.38 million won ($1,210). But it surged more than 40 percent on Wednesday when the firm closed at 1.96 million won thanks to its growth despite Kun-hee's absence.
The firm's impact has also surged during the past 1,000 days, with its market capitalization reaching some 307 trillion won as of Wednesday.
Aside from the improving stock value, critics say that Jae-yong has dispelled the previous concerns by successfully shifting the firm's portfolio through aggressive mergers and acquisitions (M&A).
Last year, Samsung Electronics signed multiple M&A contracts with renowned IT players abroad. The latest in a series of M&As came in November last year when it reached its 8 billion won acquisition deal with U.S.-based auto-parts supplier Harman. This came as part of the firm's group-wide investment initiative for next-generation growth areas.
This is the largest M&A deal in Samsung's history. This is also interpreted as Jae-yong's first meaningful step-forward to find its new revenue sources that his father had not established.
"There have been widespread concerns over Jae-yong's leadership, as he had made few public appearances before Kun-hee was hospitalized," an industry source said. "But he has cast off the worries from the market by successfully managing a serious of crises such as the worldwide recall of the Galaxy Note 7."
Despite the unprecedented handset recall, the company posted a stunning operating profit of 9.22 trillion won in the fourth-quarter last year, up 50 percent from the previous year.
"His crisis management and such aggressive M&A contracts proved his capability as the new leader of the conglomerate."
But Jae-yong is now facing trouble due to the corruption scandal involving President Park Geun-hye and her confidant Choi Soon-sil. Midway through last week, the independent counsel team sought an arrest warrant for him on charges of bribery and embezzlement with regard to the scandal.
The detention warrant was rejected by the court but he still would have to go through a trial for quite a long time.
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