Samsung promotes heir apparent, shares hit record
Samsung Electronics promoted its chairman's son, Jay Y. Lee, as president in a move that tightens the founding family's grip over the world's biggest memory chipmaker as it battles slower growth.business Updated: Dec 03, 2010 10:56 IST
Samsung Electronics promoted its chairman's son, Jay Y. Lee, as president in a move that tightens the founding family's grip over the world's biggest memory chipmaker as it battles slower growth.
Shares in Asia's most valuable company with a market capitalision of $120 billion rose 4% to a record on hopes the change may bring faster execution and spur growth at a firm struggling to stop Apple's roaring march in the smartphone market.
But Samsung Chairman Lee Kun-hee, the country's richest man, may have made his biggest gamble yet by promoting his 42-year-old son with little proven management track record.
"With this management reshuffle, and the promotion of younger generation of the controlling family, some clarity has been given in that investors get a sense of where the group and affiliates headed," said Kang Sun-sik, senior fund manager at Woori Asset Management, which owns shares in Samsung Electronics.
Almost as reclusive as his father, the younger Lee has long been viewed as being groomed to head the Samsung Group, founded by his grandfather in the 1930s.
However, it won't be an easy task for Jay Lee to match the performance of his father, who has helped Samsung overtake Hewlett-Packard as the world's biggest technology firm by revenue and has reported record results each quarter this year, often beating even the most bullish street estimates.
Samsung Electronics is 50% owned by foreign investors.