Samsung officially appoints Lee as president of the third generation heir

SEOUL, South Korea (AP) – Samsung Electronics has officially named third-generation heir Lee Jae-yong as executive chairman, two months after pardoning his conviction for bribing a former president in a corruption scandal which overthrew a previous South Korean government.

Lee’s promotion is in part symbolic as he has led the Samsung Group in his capacity as vice president of the electronics company since 2014, when his late father, former president Lee Kun-hee, suffered a heart attack. Lee’s legal woes had been widely seen as a factor that prevented Samsung Electronics from quickly promoting him to president following his father’s death in 2020.

The 54-year-old is now facing one of his toughest times as the leader of one of the world’s largest manufacturers of memory chips for computers and smartphones. The economic chaos unleashed by Russia’s war against Ukraine and rising interest rates imposed by central banks to counter the rise in prices have slowed consumer spending on technology devices and deflated chip shipments.

Samsung and other semiconductor manufacturers are also facing new U.S. restrictions on exports of advanced semiconductors and chip-making equipment to China, in part in efforts to prevent American technology from advancing the Chinese military.

Samsung Electronics’ announcement that Lee is its new president came shortly after the company posted a 31% drop in earnings in the three months to September, its first annual quarterly earnings decline in nearly three years.

The company said geopolitical uncertainties are likely to dampen demand until at least the first half of 2023. It said demand could pick up by the end of next year, driven by the chips needed for new data centers and IT products.

Lee was already released from prison on probation for a year when President Yoon Suk Yeol pardoned him in August for his bribery sentence, an act of leniency that underscored the tech company’s enormous influence in the nation.

Lee was convicted in 2017 for bribing former president Park Geun-hye and his close confidant to gain government support for a merger between two Samsung affiliates that strengthened Lee’s control over the corporate empire. Park and the confidant were also convicted of the scandal and enraged South Koreans organized massive protests for months demanding an end to the shady links between business and politics. The demonstrations eventually led to Park being ousted from office.

Lee still faces a separate trial on charges of stock price manipulation and audit violations related to the 2015 merger.

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