Samsung succession plans complicated by Lee Jae-yong’s risk of jail time

The timing of Lee’s formal ascension is sensitive given how public dissatisfaction with the country’s powerful conglomerates, or chaebol, has grown in past years

Also complicating the succession is an enormous inheritance tax bill the Lee family will have to pay, possibly loosening their control over the conglomerate

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A Samsung Group flag, centre, and South Korean national flag flutter outside the company's Seocho building in Seoul on October 25. Photo: Agence France-Presse

Published: 4:21pm, 27 Oct 2020Updated: 4:21pm, 27 Oct 2020

Lee Jae-yong has been groomed for decades to take over Samsung Group, the conglomerate founded by his grandfather and built by his father into a technology giant. Yet even after the death of Lee Kun-hee on Sunday, his only son is likely to have to wait a bit longer for his ascension.

The younger Lee is in the midst of two trials over allegations he used bribery and accounting trickery to smooth his succession. While he has repeatedly denied wrongdoing, Lee faces the possibility of returning to jail if he is convicted.

Samsung may hold off on naming Lee to his father’s role as chairman of Samsung Electronics at least until the first trial is completed in the coming months, avoiding a scenario where the newly minted chairman goes to prison.

That means Samsung would operate without a chairman for at least a few more months, a lack of clear leadership that could hurt many companies. But Samsung Electronics has respected executives who run the key operations, and Lee already holds the title of vice-chairman to make broader, strategic decisions as needed.

Samsung Electronics vice-chairman Lee Jae-yong speaks during a news conference at the company's headquarters in Seoul on May 6. Photo: Reuters

“I think Jay Y. Lee will be promoted to chairman early next year,” said Lee Sang-hun, analyst at HI Investment & Securities. “He might also wait until the bribery case is finalised.”