With Samsung chief's arrest, three executives in spotlight

Hotel Shilla

16/02/2017 21:51

SEOUL, Feb 17 (Reuters) - A South Korean court on Friday 
ordered the arrest of Jay Y. Lee, the 48-year-old head of the 
Samsung Group, on suspicion of bribery and other charges in a 
corruption scandal that led parliament to impeach President Park 
Geun-hye.  urn:newsml:reuters.com:*:nL4N1G157G 
    Prosecutors accuse Lee in his capacity as head of South 
Korea's largest conglomerate, or chaebol, of pledging 43 billion 
won ($37.74 million) to a business and organisations backed by 
Park's friend, Choi Soon-sil, in exchange for support of a 2015 
merger of two Samsung companies. 
    Samsung and Lee have denied wrongdoing in the case. Park, 
whose impeachment will be upheld or overturned by the 
Constitutional Court, has also denied wrongdoing. 
    Samsung watchers have said Lee's arrest would not affect the 
day-to-day running of group companies including Samsung 
Electronics Co Ltd  005930.KS , which are run by professional 
managers, but a prolonged absence could impact longer-term and 
strategic decision making. 
    Lee's arrest is likely to put greater public focus on three 
key executives at the sprawling conglomerate. 
     
    THE MENTOR 
    Choi Gee-sung, vice chairman, Samsung Electronics 
    Choi, 66, heads Samsung's group strategy office, dubbed the 
"control tower". Known to be Jay Y. Lee's mentor, Choi had been 
expected by group insiders to take charge of the conglomerate in 
the event of Lee's absence. 
    With more than three decades at Samsung, Choi has been 
deeply involved in preparing a plan for Jay Y. Lee to assume 
control of the group from his father, who was incapacitated by a 
2014 heart attack. 
    Previously CEO of Samsung Electronics, Choi created the role 
of chief operating officer in 2010, and appointed Jay Y. Lee to 
that post. 
     
    MR. CHIP 
    Kwon Oh-hyun, vice chairman and CEO, Samsung Electronics 
    The 64-year-old Kwon, who succeeded Choi as Samsung 
Electronics CEO in 2012, mainly oversees Samsung's cash-cow 
components business, which includes the world's biggest maker of 
memory chips, a key driver of revenue and profits. 
    Known as "Mr. Chip," the low-profile Kwon may find himself 
with a larger role as he guides Samsung Electronics through the 
aftermath of last year's crisis over exploding Galaxy Note 7 
smartphones. 
     
    THE SISTER 
    Lee Boo-jin, CEO, Hotel Shilla Co Ltd  008770.KS  
    The elder of Jay Y. Lee's two younger sisters, 46-year-old 
Lee Boo-jin heads Samsung's Hotel Shilla arm, which is among the 
world's largest duty-free retailers. Shares in the company 
rallied earlier this week on market speculation that she would 
take a bigger role in the group if her brother was arrested. 
    Some group watchers dismissed that likelihood, noting that 
Lee Boo-jin does not have experience at the flagship Samsung 
Electronics or hold a significant stake in the company. 
    It is extremely rare in South Korea for a woman to assume 
control of a family conglomerate. 
    ($1 = 1,139.2900 won) 
 
 (Reporting by Se Young Lee, Miyoung Kim, Hyunjoo Jin and Ju-min 
Park; Writing by Tony Munroe; Editing by Ian Geoghegan and 
Lincoln Feast) 
 ((tony.munroe@thomsonreuters.com; +82 2 3704 5640; Reuters 
Messaging: tony.munroe.thomsonreuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA POLITICS/SAMSUNG GROUP LEADERS