Samsung's vice chairman may have to wait for promotion

Samsung's vice chairman may have to wait for promotion
Lee Jay-yong.

Samsung Group, South Korea's largest conglomerate, will reportedly downsize the number of its executives and at its key affiliates, including Samsung Electronics, to make the companies leaner and more responsive to changes in the business climate.

Lee Jay-yong, the vice chairman of the tech giant, is unlikely to be promoted as the chairman next month when the group announces its annual executive reshuffles, several news reports said.

Samsung Group said it had no official comment on the matter.

The reports surfaced as the group's key affiliates are facing lackluster earnings, which will be enough reason to push ahead with executive reshuffles and restructuring by the end of this year. Vice chairman Lee is said to be focused on revitalizing the tech business.

Samsung Electronics vice chairman Lee has been in the spotlight since his father Lee Kun-hee had a heart attack and was hospitalized six months ago.

With the elder Lee missing in action from main managerial duties as he tries to recover, his son Jay-yong has been the de facto leader of both the group and Samsung Electronics, which recently went through restructuring early last month.

It had been reported that the heir apparent would soon become group chairman, following restructuring of the group's affiliates such as Samsung Engineering and Samsung SDS.

The initial public offering of Samsung SDS, which will list on the KOSPI this week, was part of chairman Lee's inheritance process for Jay-yong and his two sisters. The capital raised from the listing would enable them to pay for mounting inheritance taxes for the chairman's diverse assets and equities.

As Samsung Electronics posted its lowest profit in three years in the third quarter, reports say that the company, especially its key mobile business, may face more restructuring next month.

The tech giant's operating profit fell 60 per cent to 4.1 trillion won ($4 billion) in the third quarter of this year, from a record high of over 10 trillion won in the same period a year ago.

Analysts had projected that Samsung Electronics would again put out poor earnings figures in the fourth quarter, amid increasing competition from cheaper Chinese smartphones and Apple's new iPhone 6, which has a version with a large screen.

By Park Hyong-ki (hkp@heraldcorp.com)

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