Transition at Samsung well under way

By Kim Yoo-chul

Samsung Electronics Vice Chairman Lee Jae-yong is increasingly assuming the role of his ailing father Lee Kun-hee.

Samsung declined to comment on power succession plans but the older Lee remains unconscious in hospital.

Executives said Tuesday that while the group is preparing for the "worst-case scenario," the chairman's illness will have no major impact because group affiliates are run independently according to their own business plans.

"His health issues have no link with management. Samsung is on a normal track," said Lee Joon, head of the Samsung Communications Team.

While daughters Lee Boo-jin and Lee Seo-hyun were staying with their father, the Lee Jae-yong is dealing with key pending issues with his top aides at his office in Seocho.

"If the chairman's health returns to normal, the junior Lee will get a more expanded role," said an executive at one of Samsung's technology affiliates by telephone.

Samsung SDS confirmed its plan for an initial public offering (IPO), a move aimed at securing money to pay for inheritance tax.

Insiders said Samsung Everland, the de-facto holding firm of Samsung, will be the next target for another IPO. Jae-yong is the top shareholder at Everland with 25.1 percent with the two daughters having 8.37 percent each.

"The final phase of Samsung's ownership structure is the transformation of Samsung Everland as a holding firm," said the executive.

Everland is expanding its business territories by acquiring the fashion business of Cheil Industries, while it dropped some money-losing business units, a move aimed at bolstering its financial soundness.

The junior Lee has been consistent in boosting his international profile by handling key issues that the corporation has to address and meeting with top Samsung business partners.

Early this month, he checked the sales of Samsung's flagship mobile product ― the Galaxy S5 ― in the United States with the company's mobile chief Shin Jong-kyun and discussed ways on how to strengthen partnerships with Cisco and Verizon.

"Jae-yong has already been involved in most critical issues that need a bold decision. The junior Lee is the person behind the scenes that has helped Samsung Electronics extend its winning streak in profits," said another Samsung official.

But as power succession hasn't been completed, it's expected that Jae-yong will take a cautious approach towards the crown as Samsung officials and analysts say he is less-charismatic than his father.

The power of the Samsung empire extends far beyond the 80 or so companies of the conglomerate.

While Jae-yong handles the group's technology-related businesses, Boo-jin and Seo-hyun are expected to run business-to-business units and media content, respectively.

"Recently, Samsung affiliates are seeing consolidation between affiliates, restructuring and business realignments. Samsung is bracing for management changes," said an official at the Federation of Korean Industries, the nation's most-influential business lobby representing interests of major conglomerates.